Banking Practice Exam

Question: 1 / 400

What is the main source of income for savings banks?

Real estate loans

Savings banks primarily focus on accepting savings deposits and providing mortgage and real estate loans. The main source of income for these institutions comes from the interest earned on loans made to consumers for purchasing homes or refinancing existing mortgages. This is because savings banks traditionally emphasize residential lending, which is a crucial part of their operations, aligning with their community-based focus and the need for affordable housing solutions.

While commercial loans and consumer loans do generate income, they are not the predominant activities of savings banks compared to real estate loans. Investment services are more aligned with investment banks or wealth management firms and do not represent the primary income source for savings banks. Hence, the correct choice accurately reflects the core business model of savings banks.

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Commercial loans

Consumer loans

Investment services

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