What’s a savings book?

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Passbooks are simple paper books that include pages intended for use with simple accounting entries in connection with a bank account. Sometimes referred to as a bank book, the passbook was considered the most common means of keeping up with the current balance in a savings account for many years. Because the passbook’s design allowed the record to fit easily into a lapel pocket or purse, taking the passbook to the bank when making a deposit or withdrawal was an easy process.

The format of the pages in a notebook is very simple. Columns are located on each page that provide space to enter the date and type of transaction, the amount of the deposit or withdrawal, and the adjusted balance in the account. Any interest earned on the bank account would be recorded in the passbook as a credit to the account, while a withdrawal would be recorded as a debit.

In the past, the account holder was not the one who made entries in the notebook. Instead, the customer would take the passbook to the bank when making a deposit or withdrawal. Bank staff would record and initialize the transaction in the appropriate columns. Some banks had a procedure that required tellers and other bank officials who handled transactions to also initiate passbook activity. When this was the case, it was not unusual for pages in institution-issued pass books to include a column specifically for this purpose.

Although there are banks that still provide a passbook to customers, this practice has diminished considerably since the advent of the home computer. Today, many banks allow customers to access account information online and download the details into financial accounting programs. This allows the customer to access a bank-generated record of the current balance in the account, including interest payments on the balance, completely eliminating the need for bank books.

Smart Asset.

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