Banking Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is associated with mutual savings banks, which are financial institutions that primarily focus on accepting deposits and providing savings accounts to individuals while also offering mortgages and loans.

Mutual savings banks were established to promote thrift and encourage savings among the general public, often with a focus on serving specific communities or groups. They operate on a mutual basis, meaning that the depositors are also the owners of the bank, allowing for a governance structure that aligns the interests of the bank with those of its depositors.

In contrast, commercial banks tend to offer a wider range of financial services and cater to larger businesses and more complex transactions, while credit unions are member-owned institutions focusing more on personal finance and offering lower fees and rates than traditional banks. Investment banks specialize in underwriting, facilitating mergers and acquisitions, and managing public offerings rather than focusing on thrift and savings. These distinctions highlight why mutual savings banks are the primary institution linked to thrift banking.