In our daily life, relationships with financial institutions are indispensable. There are many occasions in which we interact with Banks or Savings Banks, from depositing our salaries to contracting personal or mortgage loans. It can be said that banking, in general, is an economic sector of which we have to be clients almost compulsorily.
But from the client’s viewpoint, what type of entity is best: a bank or a savings bank?
Fundamental Differences
The distinguishing characteristic is that Savings Banks are not essentially profit-making entities.
For example, in Argentina, they were initiated as entities to support work for lower classes but are currently obliged by law to contribute part of their benefits to a national healthcare system. Therefore, the boxes do not have owners but have managers and are not listed on the Stock Exchange, so private capital cannot acquire them. On the contrary, banks are for-profit entities, and they can use their profits to satisfy their shareholders and whatever they deem appropriate.
Another difference is that the banks are managed by a board of directors. The Savings Banks are subject to the control of the Autonomous Community where their head office is located, and the managing bodies are elected and agreed upon by the political representatives.
It is also true that small institutions are usually less present on a national scale than banks, which can be a problem when it comes to finding offices when we are traveling. But the large and medium institutions are already in almost all places.
Which is better?
Regarding this question, it is difficult to surmise if benefits or better conditions are available for clients of a bank or a savings bank.
At first, it was true that the savings banks were specialized in family savings and small businesses. At present, they have changed their strategies and have become more banks than savings banks. In fact, the volume of mortgages or deposits are equal to those of big banks. With the current financial market where entities strive to win customers, banks and savings banks have similar strategic and business plans. This translates into competition among them in terms of the price of their mortgages, deposits, pension plans, and additional products and improves their efficiency and attention. Today, there are no differences between the prices of mortgages or other loans, the commissions they charge, or the returns on investment products offered by banks and savings banks.
Regardless of the institution you choose, it is important to find one that can provide a savings account. In general, a savings account helps you avoid going into debt, but selecting the best saving account type is not an easy task. Therefore, you have four choices to choose a suitable savings account. They are checking account, saving account, certificate of deposit account (CD), and money market account. The best way to select the correct product is to know the core requirements regarding the savings account. You must know the current deposit that you can pay right now, the value of the interest rate, the ratio of accessing the money, and the frequency of writing checks against your balance.
Conclusion
The best financial institution for a client must be found by comparing all available options, regardless of whether it is a bank or a savings bank. Instead, consider other factors such as proximity to offices, Internet services and telephone, presence at the state level, and in particular, prices for specific services. Additionally, you should consider the professional treatment they provide, including advice, speed of service, and problem resolution.
Therefore, one should always compare, compare, compare, and then decide.
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