Making money with mutual savings bank accounts - anybody ever do this?


Article conclusion:

Investing in small banks can be a lucrative form of investing that the average person can participate in very easily. Let’s review the process:

  • Open up a savings account at a mutual savings bank likely with less than $10 billion in assets. The account you open typically has to have around $50 in it and be open for at least six months before a bank goes public.
  • Look for a bank with the following characteristics: It is a mutual savings bank and not yet publicly traded; it has an older Board of Directors and senior management team with perhaps some background in taking companies public; it may have a mutual holding company and is growing fast and aggressively.
  • Once the bank goes public, this is when you want to buy as much stock as you can afford because you will likely get it at a nice discount, perhaps up to 50 percent off.
  • Watch the stock for three to five years and wait for a possible acquisition to happen, giving the stock another nice premium.

If you really want to find a mutual savings bank that will eventually go public, make lots of modest-sized deposits in all local area mutual savings banks — you only need $50 per deposit. This will spread the risk of no conversion. Eventually one of your mutual savings banks will convert. Then pile in with as much money as you can to buy the stock.


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This was a big thing a few decades ago when there were so many mutual banks and fewer regional bank holding companies. Ed Thorpe (father of card counting, option pricing, convertible arbitrage, early statarb) wrote about doing it at scale in his memoirs.

I think your right to buy shares is usually allocated pro-rata to your deposit, so $50 wouldn’t work. And you’d need some insight as to which ones are doing it soon or likely to do so. I looked at one or two local to me, and they’re still mutuals, five years later.

Interesting idea. Thanks for the thread.


Here’s a list. A lot are dead already.

One idea if you have one local to you is to just bank there for real. Consider the potential future IPO to be a signup bonus.

And I’m hoping you didn’t just join 22 minutes ago just to post this link. We’ll be watching you :slight_smile:


Every great once-in-a-while, a CU will go through this or a similar process. The two that I recall issued stock on a pro-rata basis of savings and checking deposits as of a certain time – before any announcement was made public.

Echoing TravelerMSY, a person could go broke chasing a zillion CUs or banks that could potentially go through this sort of a process in the future.