Do you aspire to build a stronger sense of community within your local neighborhood? With the UK becoming more diverse, it can be difficult for communities to stay connected.

To help strengthen and create social cohesion, building society has become increasingly popular in the United Kingdom as an accessible way for all members of society to get involved and feel included.

This post will discuss the importance of building society in our ever-changing landscape and other details. So get set, go!

What Are Building Societies?

The building society is the right choice if you’re looking for an alternative to traditional banking.
These societies provide their members’ with various services, such as mortgages and demand-deposit accounts.

Not only that but they are also owned by their members; unlike banks, any profits are reinvested rather than given to shareholders.

Building societies offer competitive fees, decent interest rates, and customer service tailored to the societies’ membership.

If you’re looking for something more member-focused and down-to-earth compared to regular banks or credit unions, why not see if there’s a building society in your area?

How Do Building Societies Work?

Look no further if you’ve ever heard of a building society and wondered how it works! A building society is a financial institution that provides savings accounts and mortgages.

When you put money into a building society account, you will receive interest on each pound you save – this is how the building society makes its money. This money is then lent out as mortgages to borrowers who are charged interest for taking out these mortgages.

Every loan from the building society provides more income and helps expand the organization. It’s truly amazing how these societies work and their positive effects on our economy!

Do Building Societies Offer High-Interest Rates?

As mentioned above, a building society is a financial institution that operates similarly to a bank but is owned and operated by its members.

This ownership structure means that their overheads are significantly lower than a regular bank, allowing them to offer much more competitive rates on mortgages and savings accounts.

For anyone looking for a better deal on a home loan or higher interest rates from their savings account, opting for a building society could pay off.

It never hurts to do your research, so it’s worth checking out what deals your local building society may be able to offer you before going with a traditional bank.

Differences Between Traditional Banks and Building Societies

Some common differences between the two are:


Banks and building societies may appear similar to the average consumer, but a closer look reveals considerable differences – starting with how each entity is owned.

Banks have external shareholders that purchase company stocks, while building societies are mutually owned by their ‘members,’ who receive certain benefits unavailable to bank customers.

The key difference here is that while banks are driven primarily by profits, building societies exist primarily to benefit their members through competitive rates and better service.

So if you’re considering which type of financial institution to do your banking with, take the time to explore both options; you may find one offers you more than the other!


When it comes to financial products, banks usually take the cake. Banks typically offer a much wider variety of options than building societies do.

You can expect banks to provide different account options like savings accounts, money market accounts, and certificates of deposits. In addition, most banks offer diverse loan solutions such as personal, car, student, and business loans.

Meanwhile, building societies tend to focus on mortgages as their main product offering. So if you’re searching for flexibility and range when it comes to your financial needs, then banking with a bank is likely your best choice.

When To Use Building Societies?

When to use building societies? Many people looking for savings accounts and loans often turn to building societies as they tend to have more competitive interest rates than banks.

Furthermore, as a member of a building society, you will be part of an organization that considers your opinion when making decisions on how it is run, giving you a greater say in the matter.

When it comes to security, though, banks have the upper hand – but if you’re after some extra cash or thinking of taking out a mortgage, building societies may offer some considerable savings.

When To Use Banks?

When it comes to transferring and managing money, banks are often a better choice than building societies.

Their regional limitation means that building societies can only sometimes provide the service desired by their customers, while banks can offer their services on a much larger scale.

Moreover, banks are more convenient to use as they offer a wider range of services, such as foreign currency accounts, that building societies may not offer.

When needing access to a broad range of financial products and services, then banks are the answer, but if you are looking for something more local or require additional advice, then it’s best to do your homework and compare before making any decisions.

How Many Building Societies Are Working In The UK?

The UK’s building societies and credit unions provide an important service – providing financial support to so many people.

With 43 building societies across the country, customers have a great selection available when choosing how to manage their money.

What’s more, among these building societies, most funds earned are given back directly to their members.

Customers get a share of the profits in return for their loyalty. It is comforting to know that the Society you give your money to will ensure it is returned to the business and benefit you.

In The End:

With that being said, we hope this article has cleared some of the cobwebs from your brain and given you a greater understanding of building societies in the UK. They may not be as common as banks, but they play an important role nonetheless. And who knows, maybe one day you’ll find yourself becoming a member of one!

By Dave

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