Today, the phrase “savings bank” is moving away from mass use, and we don’t even think about the fact that the country's leading bank, Sberbank, grew out of this very phenomenon. Where did this financial phenomenon come from and how does it work? In the article, we will talk about the year in which the savings bank appeared, who first came up with this mechanism, and how the evolution of savings banks into modern credit institutions took place.
Concept of savings
As soon as a person had surpluses of material assets, he began to think about their preservation for future use. So the idea of savings came up. At first, this process applied only to products - it was always common for people to stock up food in case of starvation. This is an absolutely instinctive activity, as our body stores excess calories in the fat folds, and a person like protein, for example, makes reserves for the future.
But the concept of savings is associated with saving money. For the first time, it occurred to people to save money for the future several tens of hundreds of years ago. For example, in China there was a tradition of depositing coins on a rainy day in clay clogged pots. It was possible to extract money from there only by breaking a vessel. For many centuries, people simply saved money, they did not bring any income, and only when the idea arose that these savings could be put into circulation, a savings bank appeared.
Savings bank concept
Gradually, a special financial mechanism was emerging that made it possible to create savings and at the same time receive income from them. A savings bank is an organization that attracts them from the population and pays interest to depositors. The opportunity to increase capital is provided by the issuance of savings for temporary use to those who wish (credit), for which they, in turn, pay the box office.
Today, savings banks and banks are an important part of the economy of any state. There are even indicators of population savings rates that ensure the stability of the economic system. Also, the amount of capital saved is a good criterion for assessing the general situation in the state. Since people start saving money only when they have enough.
Principles of operation of a savings bank
There is already a traditional way of accumulating funds for subsequent consumption by the population - this is a savings bank. People’s deposits bring them income, which is the main motivating factor for contacting a financial institution to create their own reserve funds, rather than putting coins in a glass jar in a home cabinet. But where does this profit come from?
To pay people interest, you can use two mechanisms. The first is known as the financial pyramid: investors receive interest from newly attracted customers who have brought their money. Such a scheme has a high risk of failure, since any massive withdrawal of deposits leads to collapse, and some customers will not receive not only interest, but also money paid.
And the second mechanism is more complex. It implies that money, in order for them to generate income, can be loaned at interest or invested in some other profitable mechanisms. Savings banks mainly operate on the basis of the "deposit-credit-interest" scheme, not engaging in investments.
The history of the emergence of savings banks in the world
For the first time, the principle of financial savings mechanism was formulated by the writer D. Defoe, who was thinking about how to develop the foresight of the population. Based on his ideas, in 1778 in Hamburg a local entrepreneur opened an office for receiving cash deposits at 3%, which could be returned at the request of the depositor. But then the idea received only a local implementation.
The boom of savings banks begins in England at the turn of the 18th-19th centuries. Then the first savings bank appeared, which guaranteed the return on investment and interest. In 1817, the first British law on such financial institutions was passed. They were instructed to place borrowed money only in reliable funds and government loan bonds. Thus began the interaction between savings banks and the state economy. She received additional funds and motivated the population to create savings.
Initially, savings banks were designed for the lowest income groups. Therefore, a maximum contribution of 150 pounds was established. This allowed the poor to create a financial “airbag” for an unforeseen event, which was also beneficial for the state and large capitalists, because it removed the need to take care of the poor, those who lost their jobs or became ill. Since the beginning of the 19th century, savings banks began to appear in many countries of Europe and in the USA.
The first savings banks in Russia
This boom also did not bypass the Russian Empire. The first savings bank in our country appears in 1839 by order of the emperor. These were savings and auxiliary funds for peasants - so the state began preparations for the abolition of serfdom.
In 1841, at the behest of the tsar, the first city savings banks were reopened in Moscow and St. Petersburg. At first, the minimum deposit was 50 kopecks, and the maximum - 300 rubles, later these figures were increased. The first such institutions were created at enterprises and public services, and since 1880 they began to open cash desks at branches of the state bank, at post offices and railway stations.
In addition to demand deposits, “conditional” deposits were accepted here, i.e. on special, specific conditions, as well as deposits in securities. Cash desk employees thus mediated between citizens and the state. Later, a life insurance service for the population appeared. Also, cash registers from the end of the XIX century have become an instrument for the sale of government bonds, as well as for conducting winning loans. Gradually, cash desks became a multifunctional lending institution.
Savings banks of the Soviet era
After the coup in 1917, the new government first declared the deposits of the population inviolable and royal loans annulled. Gradually, inflation led to the actual depreciation of deposits. After the first world and civil wars, a new economic policy was announced, and a new financial instrument appeared - the USSR savings bank.
These institutions were a means of carrying out financial reform, their main task was to protect the wages of workers during inflation. Over time, they also assigned the functions of population insurance. In 1925, the government established state labor savings banks of the USSR. Various types of deposits were provided for in them , through which state loans and the sale of winning bonds were held.
By 1933, more than 50 thousand savings banks were operating in the country. During the Second World War, the government froze the deposits of the population, and this money became essential assistance in ensuring the defense capability of the state. After the war, monetary reform and modernization of savings banks were carried out. Later, the state actively used the opportunities of these institutions for internal loans from the population.
Since the economic situation in the USSR in the years 60-70 was specific: the population had money, but there was often nothing to spend it on, the authorities encouraged people to invest in government bonds and to create savings accounts. It was then that such a popular slogan arose: “Keep money in a savings bank!” With the change in the economic course in the 90s, the actual freezing and partial cancellation of the deposits of the population took place. The state still pays miserable compensation to certain segments of the population. While the end of this procedure is not visible.
Savings banks today
Today, in many countries, such a financial phenomenon as the state savings bank continues to exist. These institutions are aimed at attracting medium-sized contributions from the population. But all the same, the box office is a very small part of the modern financial system of developed economies. So, in Italy, for example, only 87 savings banks operate, in the USA they account for only a few percent of the country's total financial turnover. Such a decrease in these institutions was a consequence of the development of the global banking system.
Savings banks and their specifics
Over time, in many states, savings banks have been turned into savings banks. What does this mean for the simple consumer? These institutions provide more services. Here you can not only open different types of deposits, but also take a loan for any needs, solve investment problems, conduct operations with currencies and other valuable assets.
Banks conduct cash settlement transactions, offers insurance programs. Today, the concept of "savings bank" is increasingly moving closer to the concept of "commercial bank." The difference, basically, remains only in the founders - most often in savings banks one of the leading founders is the state.
Sberbank of Russia
At one time in the USSR, the main financial slogan, as we already mentioned, was the phrase: "Keep money in a savings bank." This slogan is applied to itself by Sberbank of the Russian Federation, and not without reason. In 1988, the state labor savings banks were reorganized and turned into the Savings Bank (Sberbank). And so far, people have a strong feeling that this is a state bank, although in the 90s it became a joint-stock company with the involvement of private capital. But the state retains its share in the authorized capital of Sberbank and actively supports it, shaping its positioning as the country's main bank.
Types of Savings Bank Operations
Initially, any central savings bank accepted deposits of the population at interest on demand, then there were time deposits and sale of bonds. Today, savings banks also offer cash and settlement services, currency exchange, deposit services, as well as lending and investment. In addition, Sberbank offers collection services, work with securities and other assets, deposit insurance, life and property insurance.
Functions of a Savings Bank
The most important function that the savings bank performed was to raise funds from the population. In this sense, savings banks continue this tradition - they are the main instrument for mobilizing savings and integrating them into the real economy of the country.
These financial institutions are an important part of the economy, as they provide the movement of capital, and also stimulate the population to create savings, which also plays a significant role in the financial system of the state.