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. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
RELATED FAQS
  1. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
  2. What are the similarities and differences between the savings and loan (S&L) crisis ...

    The savings and loan crisis and the subprime mortgage crisis both began with banks creating new profit centers following ... Read Full Answer >>
  3. What tax implications are there for parties involved with a reverse repurchase agreement?

    A reverse repurchase agreement – sometimes referred to as a reverse repo – is the purchase of an asset with a simultaneous ... Read Full Answer >>
  4. What are the long-term effects of delinquent accounts?

    Delinquency occurs when borrowers fail to make payments on their loans. All loan borrowers should do their best to avoid ... Read Full Answer >>
  5. What measures could the U.S. Government take to prevent another crisis similar to ...

    Some of the measures that the U.S. government can take to prevent another crisis similar to the savings and loan (S&L) ... Read Full Answer >>
  6. How was the American Dream impacted by the housing market collapse in 2008?

    The American Dream was seriously damaged by the housing market collapse in 2008. In many ways, the American Dream is a self-fulfilling ... 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. Savings

    How Interest Rates Work on Savings Accounts

    Here's what you need to know to grow your rainy-day fund.
  5. Home & Auto

    Strategies To Buy The Perfect Vacation Home

    Ask yourself these six questions to make the right decision about a vacation property.
  6. Retirement

    Is Your Mortgage Robbing Your Retirement?

    If you picked the mortgage with the lowest possible monthly payment, you may be blowing what could be your retirement money on mortgage interest.
  7. Credit & Loans

    How Interest Rates Work On A Mortgage

    A step-by-step explanation of the interest calculations, mortgage types, and how the loan is eventually "retired" – which means paid off.
  8. Credit & Loans

    How Risky Are Long-Term Car Loans?

    A look under the hood of long-term car loans.
  9. Credit & Loans

    How Interest Rates Work On Car Loans

    Three big facts to know – and some numbers to crunch to get the best deal.
  10. Credit & Loans

    Refinancing A Mortgage? Ask About The Fees First

    Before deciding that refinancing your mortgage at a lower interest rate is a good deal, factor all the fees into your calculations.

You May Also Like

Hot Definitions
  1. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  2. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  3. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  4. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  5. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  6. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!