What is building society banking and what do the building societies offer?
A building society is an organisation which is owned by its’ members – i.e. the people who invest in savings schemes and those who hold mortgages and other accounts with them.
This means that there are no share-holders to pay dividends to based on company performance, and that the building society is often run and managed by those who have some ownership. Building societies offer much the same banking services as do banks.
Who can use a building society?
Banks and building societies have similar levels of adversity to risk. Most people can set up an account but the building society may not be able to offer a potential customer the full range of their product portfolio if they have:
- Poor credit history
- Outstanding county court judgements
- Fraud convictions
- Defaulted on payments previously agreed
The building societies offer a similar range of products to the banks:
- On-line Current, and Savings Accounts
- Standard Current Accounts with a cheque book, credit card, debit card, overdraft facilities and monthly statements
- Current Accounts for Children, Teenagers, Students, and Graduates
- Accounts which Pay Cash-Back - On what is spent if a pre-arranged amount is paid in per month (typically, £1,000)
- Accounts which pay an Annual Earnings Rate (AER) - If a pre-arranged amount (typically £1000) is paid in each month
- A straight-forward account - No cheque books, credit or debit cards or overdraft facilities
- Credit Cards
- Often, an Estate Agency
- Insurance - House, car, travel, pets, healthcare, life and critical illness
- Investments – ISAs, child trust fund, stakeholder pensions plans, share dealing
- Loans - Sometimes provided through an associated organisation
- Travel Services
- Mortgages - Including all types of repayment mortgages, endowment mortgages (more on mortgages in the mortgages section)
- Business Accounts and Services
- Savings Accounts of all types
