Banks and Building Societies

[Coldicote]

We are hearing a lot of disturbing news about Banks, but rarely any mention of Building Societies. Are Building Societies less risky places to put one's savings and does the same guaranteed sum apply in the event of one collapsing? Advice appreciated, thank you.

[loonytunes]

Building societies are much safer than banks as they are mutual societies raising money from members to lend to people to buy houses. Those, such as Halifax and Abbey converted to banks years ago to be able to obtain funds from other sources and involve themselves in much riskier business. The wheels are now coming off because of this profligate stupidity. Building Societies are controlled and inspected much more vigorously.

[Ethel]

The guarantee is the same �50,000 per person, per institution.

Remember some banks and building societies are owned by the same umbrella institution.

[Panic Button]

I tghink you mean banks and former building societies Ethel.

A bank can't own a building society.

Building societies are vulnerable to a run, if their members get cold feet and ask for their money back.

[Coldicote]

Many thanks for these replies. Pity there isn't more publicity about this, though I do wonder how one can be sure whether a building society is still a building society and has not converted to become a bank. They seem to offer very similar services to banks.

[Buenchico]

As others have indicated, a building society is effectively a 'club', which provides lending and savings services to its members.

If you're not sure about the status of a particular institution, simply look at this list. If it's on the list, it's a building society. If it's not, it's a bank:
http://www.bsa.org.uk/aboutus/buildsocmember.h tm

Chris

[Ice.Maiden]

Blow the interest. Stuff your money under the mattress, and at least you know that it's more or less going to stay there until you want to spend it. : )

[dasherman]

Building societies can borrow money in the same way as banks do,but they are limited to 50% of their total lending.

[Coldicote]

An interesting list, thank you Buenchico - I hadn't realised there were so many buiding societies. And IceMaiden you say money is 'more or less' going to stay there under the mattress?? Burglars would have a heyday if many took your advice ;~[ Interesting about the 50% limit on borrowing, disherman. Thanks everyone.

[EverClean]

Ice.Maiden - please let your contents insurer know the amount in cash you have stashed. You will need to be covered for it.