But there are few good opportunities for lending money in small amounts, without great risk, and the requirement of skill, time, and labor to look after the loans and to collect the interest is prohibitive to a small lender.

To provide a place where small sums could be kept with safety and so as to yield a moderate rate of income, the first modern savings bank in the United States was instituted in New York in 1816 after a plan already developed in England.
In form these banks are mutual, having no capital stock on which dividends are to be paid.

The boards of trustees are self-perpetuating and receive only fees for attending meetings.

In their legal aspect these banks have a philanthropic character.

Their investments are limited by law to specified, conservative classes of securities and loans on real estate.