Building Societies

Pocket Money

1 Jul

(The weekly series - Pocket Money - where I explain financial basics in fewer than 200 words. Feel free to make suggestions!)

Building societies are financial institutions and function, nowadays, pretty much like banks.

The big difference is that they’re owned by their members, rather than shareholders. When you open an account, you automatically become a member, which often means you get the right to vote on how the society is run. Because the societies are not prioritising profits for outside investors, they can often offer more competitive savings rates or mortgage deals.

This focus on members’ interest also means that they often have a more local, community-based focus too.

Originally building societies were created to help people pool money together to build homes but now they offer many of the same services as banks - current and savings accounts, mortgages and sometimes insurance. They are also covered by the Financial Services Compensation Scheme which protects your deposits up to £120,000.

Love Eleanor. xxx

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Eleanor Burke

Building Societies

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