26 U.S.C. § 591 — Deduction for dividends paid on deposits

(a) In general. Mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised under federal or state law as savings-and-loan or similar associations may deduct from taxable income amounts paid or credited to depositors or account holders as dividends or interest on deposits or withdrawable accounts. The amounts qualify only if they can be withdrawn on demand, subject only to customary notice of an intent to withdraw. (b) Mutual savings bank to include certain banks with capital stock. For this part, "mutual savings bank" includes a bank (1) whose capital stock is represented by shares and (2) that is subject to and operates under federal or state laws relating to mutual savings banks.