Banks & building societies (2024)

FAQs

Are banks or building societies better? ›

Building society versus a bank

Typically building societies offer higher interest rates when compared to a bank, but banks do offer a broader range of products. “Best buy” tables available online, or in the financial pages of newspapers and magazines can be a guide but tend to focus on the benefits of being in credit.

A customer owned bank is also known as a credit union, mutual or building society. Unlike other banks that are owned by external investors, customer owned banks are owned by their customers (or members). This is the reason why customer owned banks can put their customers first.

A building society is also a financial organisation offering some of the same products and services as banks, but most often with a focus on savings accounts and mortgages. Building societies are referred to as 'mutuals', as they are owned by their members rather than external shareholders.

By converting into banks, former building societies gained greater access to wholesale borrowing, to new types of investors and to the unrestricted use of financial instruments such as securitisation.

How is it ethical? As a building society, Nationwide must hold at least 75 per cent of its assets in residential property, making it far less likely than its big bank competitors to be lending to unsustainable firms.

FSCS will pay compensation within seven working days of a bank or building society failing. You don't need to do anything, FSCS will compensate you automatically.

Lower running costs. On average, a building society is cheaper to run than a bank as it's owned by its members. This could mean that the savings are passed on to the members in the form of competitive interest rates.

Building societies are financial organisations often referred to as 'mutuals' as they are owned by their Members. This means that every borrower or saver of a building society has a say on how the society operates, that's why they are referred to as 'Members' and not customers.

The decision to go with a bank or a credit union is dependent upon for what you're looking. People choose banks primarily because of the convenience of multiple branches across the country, along with better technology.

Send an electronic payment

If you bank online, setting up a transfer from another organisation might be the quickest and easiest way to pay money in. You can make one-off payments or set up a standing order. Account number: Your eight-digit account number.

How do I know if my bank is a building society? ›

Whilst most standard UK bank accounts have an 8 digit account number and 6 digit sort code, some Building Society accounts may also have what's referred to as a 'building society roll number' or just a 'roll number' - a reference code with letters and numbers.

One of the main differences between a building society and a traditional bank is that building societies are mutual organisations. This means that they don't have shareholders and instead, use their profits to benefit their members by offering better rates on mortgages, savings accounts and other financial products.

As of February 2024, there are 42 independent building societies, all of which are members of the Building Societies Association. account?

Nationwide Building Society is a British mutual financial institution, the seventh largest cooperative financial institution and the largest building society in the world with over 16 million members. Its headquarters are in Swindon, England. Nationwide is made up of around 250 different building societies.

One of the major downsides of traditional banking is the potential for fees. Traditional banks often charge various fees for services such as overdrafts, ATM withdrawals, and account maintenance. These fees can quickly add up and eat into your savings if you're not careful.

In theory, building societies are safer than banks because they can only raise limited capital from the now frozen wholesale markets. But plenty still took that option the average proportion of funds raised that way is 30%, says the Buildings Society Association.

Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.

Better interest rates: Credit unions typically offer higher interest rates on savings accounts because they have lower overhead costs than banks. Similarly, they offer lower interest rates on loans. Customer service: Credit unions pride themselves on offering better customer service than banks.