Bank accounts v Building Societies

amorphix

There's a lot of mistrust now from people towards banks, and rightly so. I myself have closed all my accounts and moved to Building Societies who generally offer much better rates and deals, as they have no shareholders, and members own the Building Society and have voting rights etc. The longer you're a member, the more preferential benefits you get generally speaking.

Of all the building societies, I found Nationwide to the best by far. I recently got a 100% mortgage from then, with a very competitive 4-year fixed rate, no legal costs, no surveyor fees etc. In short, a very good deal which my financial advisor told me was unmatched by anything in the market. You even get £50 credited to your new Nationwide account, just for being referred by an existing account holder. (If anyone fancies £50 free, just send me a message and I'll refer you!) :beer:

Another thing I like about Building Societies (especially Nationwide) is that their overdraft facilities are generally more generous and their fees are reasonable and transparent. For example with Nationwide you don't pay anything if you go overdrawn only slightly in an agreed overdraft and pay it back within so many days, else it's just £1 a day.

Now, the banks are working hard to re-gain trust. Santander have a very good deal with their 1-2-3 Account which actually pays you cashback on a wide range of purchases, from utility bills, to food shopping, to mortgage payments. I calculated if I switched to a 1-2-3 account I could make around £450 a year just from having it as my main current account. Not bad. I was actually with Santander before Nationwide, and went overdrawn just just 24 hours, and they tried to charge me £25+£5. I withdrew all my funds, and said no way I was paying those extortionate charges, and wished to close my account. Surprise surprise, the lady on the phone offered to wipe off the fees as a "one time gesture of goodwill". But I decided to move to Nationwide in the end anyway because of their mortgage deal and I think in the long term, you benefit from building a relationship with your Building Society.

Archi_Bald

Some of us don't see it as an "either or" and use both, banks and Building Societies (or credit cards). Each have their own strengths and weaknesses at different times, and you are bound to get "best deals" at different times in different places.

I can't comment in detail on overdraft fees because I never go overdrawn. I do know, though, that the FlexDirect might give you a completely free overdraft for 12 months. As do many credit cards.

I also can't comment on current mortgages from personal experience since I haven't got one myself.

Getting "more preferential benefits the longer you are a BS member" is what their Marketing departments love to use. In effect, however, there has been just about nothing in the last few years that couldn't be bettered elsewhere, without the need to be a long standing account holder.

My approach remains to go after the best deals available in the industry, rather than kidding myself about a beneficial relationship with "my" bank or BS.

opinions4u

I recently got a 100% mortgage

Don't believe you.

cockmad

You are a good advertisement for Nationwide amorphix, but I feel you are being naive. They will treat you the same as everyone else and should you get into difficulties, you will soon change your tune. Your loyalty is misplaced IMO.

If you can save £450 a year with Santander, then by all means use them too as Archi Bald said and every other bank and credit card you can get products from that suit you.

Loyalty is very seldom rewarded.

Gromitt

opinions4u wrote: »

Don't believe you.

My brother recently got a 100% mortgage as well. The house was sold to him for ~£40K and the valuation was ~90K, so I don't think the bank care if he pays off the mortgage or not, they are quids in.

ManAtHome

Most of my savings have moved from Building Societies to Banks...

I've been a member of Nationwide for many years (current account, formerly savings, no mortgage or overdraft) and they have dropped from one of the best to one of the worst over the last few years - I strongly suspect many of the board would rather it was a bank (kerching!).

Now I just use the current account for internetting - advantage is you can switch off the overdraft, so if the cash isn't moved in (from Santander) it can't be nicked.... Still, each to his/her own as they say.

CKhalvashi

Archi_Bald wrote: »

Some of us don't see it as an "either or" and use both, banks and Building Societies (or credit cards). Each have their own strengths and weaknesses at different times, and you are bound to get "best deals" at different times in different places.

I can't comment in detail on overdraft fees because I never go overdrawn. I do know, though, that the FlexDirect might give you a completely free overdraft for 12 months. As do many credit cards.

I also can't comment on current mortgages from personal experience since I haven't got one myself.

Getting "more preferential benefits the longer you are a BS member" is what their Marketing departments love to use. In effect, however, there has been just about nothing in the last few years that couldn't be bettered elsewhere, without the need to be a long standing account holder.

My approach remains to go after the best deals available in the industry, rather than kidding myself about a beneficial relationship with "my" bank or BS.

I'm with this opinion, however something I refuse to do, is move my personal banking away from HSBC Private, purely for the level of support and flexibility given to customers in this market. I was originally a standard HSBC account holder in Moscow, then HSBC Premier etc.

On the standard scale, however, I have large savings with Nationwide, Saffron BS, and three of the high street banks (plus HSBC, who hold our investments), and current accounts with Santander (123) and Barclays, the latter of which isn't used often, plus 'vantage' savings with Lloyds and 2x Halifax Rewards.

Once you've set up the correct automated system, it all works very well!

CK

CK

opinions4u

Gromitt wrote: »

My brother recently got a 100% mortgage as well. The house was sold to him for ~£40K and the valuation was ~90K, so I don't think the bank care if he pays off the mortgage or not, they are quids in.

So it's a discounted purchase with a mortgage for 44% of the valuation.

Gromitt

opinions4u wrote: »

So it's a discounted purchase with a mortgage for 44% of the valuation.

Yes, but to him he's paying no deposit and no fees, so its a 100% mortgage. Once the mortgage is paid off, the house is 100% owned by himself (ie, not a shared ownership).

pinkdalek

I don't get this thread.
Banks and Building Societies are regulated by the same financial body.
If you want to vote in a bank just invest in some shares, which potentially can earn you a better return, look at Lloyds share price over the past year as a good example.
And if voting is something that appeals do you know exactly what you vote for? You vote for which overpaid, and underworked clueless idiots get to run the company - whether bank or building society. In summary they are both there to make money and the old cheesy slogan about putting its members first is balderdash. Nationwide like to say they are a building society but they very much act and behave like a bank.

Every bank/building society offers different and various deals, it's called competition. It would be boring otherwise. But the best rate, best deals don't mean the best service does it? Plus in the town I live there isn't a Nationwide/Yorkshire in fact not one B/S but there is Barclays/Halifax/HSBC/Nat West/RBS/Santander/LTSB..........I rest my case there.

Bloomberg

pinkdalek wrote: »

I don't get this thread.
Banks and Building Societies are regulated by the same financial body.
If you want to vote in a bank just invest in some shares, which potentially can earn you a better return, look at Lloyds share price over the past year as a good example.
And if voting is something that appeals do you know exactly what you vote for? You vote for which overpaid, and underworked clueless idiots get to run the company - whether bank or building society. In summary they are both there to make money and the old cheesy slogan about putting its members first is balderdash. Nationwide like to say they are a building society but they very much act and behave like a bank.

Every bank/building society offers different and various deals, it's called competition. It would be boring otherwise. But the best rate, best deals don't mean the best service does it? Plus in the town I live there isn't a Nationwide/Yorkshire in fact not one B/S but there is Barclays/Halifax/HSBC/Nat West/RBS/Santander/LTSB..........I rest my case there.

So there is no Nationwide in your town, hardly a loss. I used to be with the nationwide and think that they are seriously over rated. Like you so rightly say the are a bank in building society's clothing. In my travelling days they were good for the free overseas cash withdrawals and that was about it. Their full statements were a day behind, no weekly standing orders and if you wanted an overdraft it would take two days to become available. They are not particularly lively.