Final answer:
Mutual savings institutions are owned by the individuals who deposit money into them and operate as financial intermediaries which focus on residential mortgages. They differ from commercial banks as they are structured as a mutual organization, giving depositors rights and potentially benefiting from the profits in the form of better rates.
Step-by-step explanation:
Mutual savings institutions are owned by the individuals who deposit money in the institution. These organizations are a type of financial intermediary that traditionally focused on residential mortgages, using the collective funds of depositors to finance loans.Unlike commercial banks that may be owned by shareholders or private investors, mutual savings banks are set up as a mutual organization, which means that depositors and borrowers can also be members with voting rights on institutional policies and decisions. The profits of these institutions may be distributed to members in the form of lower loan rates or higher savings yields.
Credit unions also follow a similar mutual structure, where members are both customers and partial owners of the institution.The FDIC (Federal Deposit Insurance Corporation) insures deposits at most banks and savings institutions, providing a layer of protection for depositors' funds. The US government does not own mutual savings institutions, but it establishes regulations and insures deposits through organizations like the FDIC and the National Credit Union Share Insurance Fund (NCUSIF) for credit unions.