Chapter IX - Savings Banks Page 02

THE LIMIT OF DEPOSIT

Different banks have different limits of deposit, that is fixed sums beyond which they will not receive.

The limit is from one thousand to five thousand dollars.

When the fortunate depositor has reached the limit with one savings bank, there is no law to prevent his opening another account with another, or with any number of similar banks.

Remember the savings banks are not meant for capitalists, but for small depositors.

After deposits and interests have reached a total of $1,600, the interest will not go on earning interest, but will be regarded simply as a deposit.

This is in compliance with law.

Depositors, posted as to the law, open another account with another bank, and keep on till the interest limit is reached.

HOW TO DRAW MONEY

A savings bank depositor may either draw money himself or through some properly authorized person.

This is the method:

The deposit book is presented to the paying teller. The owner states the sum he wants to draw.

Having assured himself that the bearer of the book is the right person, the teller takes a receipt in a book kept for the purpose, for the amount, enters the same on the right hand or debit side of the book, and hands out the money.

There is a form of authorization for another to draw, printed on the deposit book. This must be copied and its directions complied with.

Most banks will not allow depositors to draw out less than a fixed sum, say $5.00.

This saves trouble, and prevents thoughtless depositors from going to the bank every time they want a dollar.

Before a depositor can draw a large sum from a savings bank he may be compelled, under the law, to give from one week to six weeks' notice of his intention.

This provision may not prevent a run on the bank, but it gives the managers time to provide for it.

Read the rules in the deposit book.

HOW SAVINGS BANKS EARN

How can a bank that does not discount notes or deal in loans and commercial paper earn money? How can it pay interest?

While they may be individually small, the aggregate of all the deposits in a savings bank may, and often do, amount to many millions.

This money is not allowed to lie idle.

Under the skilled direction of the bank officers, the money, instead of lying idle in the vaults, is invested in many ways, but always in accordance with the laws of the state under which the bank is chartered.

Much of the money is invested in mortgages on real estate, never on personal property.

National bank stocks, sound railroad bonds, and other forms of reliable interest security are fields for the investment of savings bank funds.

Savings banks are subject to the periodic inspection of state officers appointed for the purpose.

The failure of a savings bank through bad investments or the dishonesty of officials is very rare.

Avoid all banks that promise more than the regular rate of interest.

Private banks may be, and usually are, honestly conducted, but to be safe, deposit only with a bank that is regularly chartered and is subject to the inspection of the law.

The savings bank is the best for the wage earner.

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