Building society benifits.

surfinsfree

Hi Everyone,

I thought that someone might be able to help me with a ?.

I have my savings with nationwide. There seems to be better cash isa's out there but I've been told to keep with nationwide on the off chance that some time in the future they might do a Halifax and become a bank, giving long term customers shares.

Is there any truth in this?

Also what are the benifits of a building society over a bank?

Thanks.

talana

So you're weighing up the certainty of better savings products out right now against the remote off chance of some reward at an indeterminate time in the future?

No contest to me. Go with the certainty over the off chance.

purch

Also what are the benifits of a building society over a bank?

If you believe the adverts on the TV then there are lots of benefits.....

In reality there are non.

As for Nationwide de-mutualising, in the current environment and likely for a few years that would be impossible.

It's far more likely that HM Gov de-mutualises them, in which case the carpetbaggers would get nothing.

cottager

I'd go along with purch and talana's views; but in any case, do you have a qualifying account? You'd need to have held one with Nationwide for quite a time to qualify for a windfall in the event they ever demutualised.

I couldn't recall when the charitable assignment clause was introduced to deter carpet-baggers, but someone mentioned on another thread the other day it was in the 90s. It looks from this article as if it was Nov 1997.

I have a qualifying account opened in the early 80s which I do hold on to, but only keep about a fiver in there and frankly I'm not expecting to see any benefit... but it's a bit like hanging on to an old £5 premium bond 'just in case'. It does no harm. The passbook's getting to look quite 'historic', if nothing else!

See also this thread:
http://forums.moneysavingexpert.com/showthread.html?p=8612303

Inactive

cottager wrote: »

I have a qualifying account opened in the early 80s which I do hold on to, but only keep about a fiver in there and frankly I'm not expecting to see any benefit... but it's a bit like hanging on to an old £5 premium bond 'just in case'. It does no harm. The passbook's getting to look quite 'historic', if nothing else!

An account with a fiver in, doesn't qualify, only accounts with at least £100 qualify, as far as I recall.

cottager

Inactive wrote: »

An account with a fiver in, doesn't qualify, only accounts with at least £100 qualify, as far as I recall.

Thanks Inactive, I didn't know that.
So let's see, on £100 a whole 8p interest p.a. roughly... wow!

But then I've always had other Nationwide accounts of one flavour or another for near on 30 yrs without a break; but granted, not the same accounts. Apart from this one with a fiver in it, they've been changed/updated as products and rates have changed. Sometimes had only the old one but at other times more: at the moment three others, all opened in the last 3 yrs.

I think it's academic as I don't believe they'll demutualise anyway, but having not known what you've now told me, as a point of interest I wondered what constituted qualification in Nationwide's case:
-- that you have collective savings of over £100 and qualify because one of the accounts is pre-1997 (you're a 'continuous customer')
OR
-- that only the pre-1997 account qualifies and must itself have £100 or more, and everything opened since doesn't count.

Had no idea, but ended up at
http://www.nationwide.co.uk/about_nationwide/the_foundation/charitable_assignment.htm
(also http://www.nationwide.co.uk/about_nationwide/the_foundation/default.htm)
and my reading of it is that a pre-1997 member with no break in membership since isn't subject to the charitable assignment clause unless those rights are given up by joining the Foundation.

What it doesn't mention is anything about a minimum balance in the pre-1997 (or any) account, but maybe that's covered elsewhere in some T&Cs. Or more likely perhaps ( ) would only be revealed if the situation ever arose: probably based on a balance at a particular point in the past which you could do nothing about. I seem to remember that's how it was when N&P merged with Abbey Nat, but could be wrong.

opinions4u

While it would make sense to leave the £100 in the Nationwide (you'd lose what? £3 a year in interest on it?) the likelihood of them demutualising or being taken over in a way that releases value to shareholders is slim.

Remember, all those building societies who demutualised have now lost their independence.

In the current climate, there is absolutely no benefit in opening up a building society to the eyes of the stock market.