Financial institution that gathers savings and pays interest or dividends to savers. It channels the savings of individuals who wish to consume less than their incomes to borrowers who wish to spend more. This function is performed by mutual savings banks, savings and loan associations, credit unions, postal savings systems, and municipal savings banks. Unlike a commercial bank, a savings bank does not accept demand deposits. Many savings banks originated as part of a philanthropic effort to encourage saving among people of modest means. The earliest municipal savings banks developed from the municipal pawnshops of Italy (seepawnbroking). Other early savings banks were founded in Germany in 1778 and The Netherlands in 1817. The first U.S. savings banks were nonprofit institutions established in the early 1800s for charitable purposes.