Thrift

AAA

DEFINITION of 'Thrift'

Thrifts are savings and loans associations. Thrifts also refer to credit unions and mutual savings banks that provide a variety saving and loans services. There are two basic thrift savings and loans: a general purpose loan which requires repayment within five years and a residential loan which must be repaid within 15 years.

INVESTOPEDIA EXPLAINS 'Thrift'

A residential loan must be used for the purposes of constructing a residence. Thrifts can be traded between institutions and investors in the form of collateralized debt obligations (CDO). Securing thrifts into pass through securities helps investors spread out the underlying prepayment risk.

RELATED TERMS
  1. Collateralized Debt Obligation ...

    An investment-grade security backed by a pool of bonds, loans ...
  2. Resolution Trust Corporation - ...

    A temporary federal agency established under the Financial Institutions ...
  3. Core Capital

    The minimum amount of capital that a thrift bank, such as a savings ...
  4. Federal Savings and Loan

    A federally chartered savings and loan is a banking institution ...
  5. Depository Institutions Deregulation ...

    A six-member committee established by the Depository Institutions ...
  6. Pass-Through Security

    A pool of fixed-income securities backed by a package of assets. ...
RELATED FAQS
  1. What is continuously compounding interest?

    An interest contract with continuously compounding interest is designed to maximize the total possible interest accumulation ... Read Full Answer >>
  2. What is the difference between continuous compounding and discrete compounding?

    Discrete and continuous compounding are closely related terms. An interest rate is discretely compounded whenever it is calculated ... Read Full Answer >>
  3. What economic factors affect savings account rates?

    At a basic economic level, the interest rate set on savings account deposits is determined by the relationship between how ... Read Full Answer >>
  4. What agencies were created by the Glass-Steagall Act?

    The Glass-Steagall Act, also known as the Banking Act of 1933, was proposed and passed by Congress in response to the failure ... Read Full Answer >>
  5. What is the rate of return I can expect on a savings account?

    Prior to the Great Recession, savings account rates offered by banks could typically be found in the 4 to 8% range, depending ... Read Full Answer >>
  6. What is a Z bond in a collateralized mortgage obligation (CMO)?

    A Z-bond is the lowest tranche in a collateralized mortgage obligation (CMO). Z-bonds, also called accrual or accretion bonds, ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
  2. Savings

    Reduce Interest With An All-In-One Mortgage

    "Offset" mortgages combine a checking account, home-equity loan and mortgage into one account.
  3. Retirement

    Thrift Savings Plan Helps Federal Workers Retire

    The TSP is key component of retirement savings for U.S. government workers and members of uniformed services.
  4. Credit & Loans

    Save? (Or Prepay Your Mortgage Or Student Loan?)

    With low-interest rate loans, you might be better off paying just your monthly minimum and investing whatever extra funds you have.
  5. Credit & Loans

    Not a U.S. Citizen? A Home Loan is Still Possible

    Many banks and mortgage companies offer conventional and FHA home loans to non-U.S. citizens, if they can verify their work history and financial status.
  6. Credit & Loans

    Should You Care About The Rising Cost Of College?

    It’s nearly graduation season, so it’s time to weigh in on why you should care about rising college costs, paying for tuition and back student loans.
  7. Credit & Loans

    Is it Worth Saving Up for a Bigger Down Payment?

    There are numerous low-down-payment mortgage options out there, but sometimes it makes sense to build up your savings so you can borrow less.
  8. Credit & Loans

    Is A 30-Year Mortgage Really Best?

    It's the most popular choice, but home buyers with 30-year mortgages may be paying more to finance their home than they need to.
  9. Credit & Loans

    What Are The Pros and Cons Of A 15-Year Mortgage?

    The shorter term, and higher monthly payment, are only part of the picture.
  10. Credit & Loans

    Which Is Better: A 30-Year Or 15-Year Mortgage?

    The difference in monthly payments is what homebuyers think of first when they compare the two. But have you considered these other points?

You May Also Like

Hot Definitions
  1. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  2. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  3. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  4. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  5. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  6. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
Trading Center