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July 1975

The Changing Competition Between Commercial Banks and Thrift Institutions for Deposits

by Jean M. Lovati

Commercial banks and thrift institutions (savings and loan associations and mutual savings banks) compete in various ways for deposits of customers. Commercial banks offer a full range of services and attract customers with “one-stop” banking. One of these services is the checking account. This type of account provides depositors with a convenient and widely accepted means of making third party payments, but because of Federal regulations, deposits in these accounts do not explicitly bear interest.