whats the difference between bank and BS

innocent_girl

Can someone please explain the difference between a bank and building society account. What are the pros and cons?
Thanks

BlueMeany

innocent_girl wrote: »

Can someone please explain the difference between a bank and building society account. What are the pros and cons?
Thanks

Could be wrong, but I dont think that nowadays there is any difference. It really depends what account you are looking at, and from what provider.

Building Society's now offer "bank" accounts.

I think BITD Building Society mostly offered accounts which were mainly for Saving money - not for general cash flow day to day. They used to take ages for things to clear, and you had to give notice of withdrawing money.

All of the above could be complete baloney however!

olly300

BlueMeany it's not complete baloney.

The main difference is that:
A Bank has shareholders while a Building Society has members

In regards to practices this means that Building Societies (BS) mainly use the savings of their members to fund lending products such as mortgages, there as banks use a variety of methods including raising money from the money markets (Northern Rock) , savings of customers and raising cash from shareholders (RBS's rights issue). When a BS is in trouble they seem to get swallowed up by a bigger BS there as anything can happen with Banks as the Northern Rock fiasco has shown.

Also shareholders get dividends but members just seem to get special offers.

In practical everyday life this means very little when operating a current account but some smaller BS don't do their own banking so for example if you pay a cheque in it could take an extra day to clear as the cheque has to be sent to a bank for processing. Also lots of BS are still operated regionally so if you live in say in Liverpool you won't have any branches of the Kent Reliance BS near you.

Milarky

olly300 wrote: »

lots of BS are still operated regionally so if you live in say in Liverpool you won't have any branches of the Kent Reliance BS near you.

There can't be any 'national' Building Societies (in terms of branches) left surely apart from the Nationwide? In terms of 'presence', however, the internet has given many regional building societies a shot in the arm since they can (if they choose) accept applications from anywhere in the UK.

There are a number of 'operating area' only building societies. Here's my list of those societies (with their ranking by size - out of the 59) :

20 Cumberland 23 Cambridge 29 Newbury 34 Marsden 42 Vernon 55 Penrith 58 City of Derry

Many others will apply some restrictions (which can vary quite a bit) on customers from outside their operating area - such as limiting some accounts - or a having a minimum of £1000 regardless of account.

15 Nottingham 26 Hinckley & Rugby 28 Darlington 31 Melton Mowbray 36 Hanley Economic 40 Dudley 41 Loughborough 44 Chesham 48 Buckinghamshire 49 Harpenden 50 Stafford Railway 52 Swansea 54 Shepshed 59 Century

That leaves the societies 'open to all customers' - which vary from the very largest to the smallest actually (ranked by 'size')

1 Nationwide 2 Brittania 3 Yorkshire 4 Coventry 5 Chelsea 6 Skipton 7 West Bromwich
8 Leeds 9 Derbyshire 10 Cheshire 11 Principality 12 Newcastle 13 Norwich & Peterborough
14 Stroud & Swindon 16 Dunfermline 17 Scarborough 18 Kent Reliance 19 Progressive
21 National Counties 22 Furness 24 Saffron 25 Leek United 27 Manchester 30 Monmouthshire 32 Market Harborough 33 Barnsley 35 Ipswich 37 Tipton & Coseley 38 Teachers' 39 Mansfield 43 Scottish 45 Bath Investment 46 Chorley & District 47 Holmesdale 51 Beverley
53 Earl Shilton 56 Ecology 57 Catholic

(underlinings are simply a result of having cut and pasted this from a spreadsheet)

Meltdown_2

What do the underlinings signify?

Meltdown_2

Milarky wrote: »

There can't be any 'national' Building Societies (in terms of branches) left surely apart from the Nationwide?

Having looked through some of those links you provided :T, it would seem that the Britannia BS ought to qualify as national (in terms of branches). A bit sparse in N.Ireland (just Belfast) and Scotland (Glasgow, Edinburgh & Aberdeen), but they cover England & Wales pretty extensively.

Thomas_Crown

BlueMeany wrote: »

Building Society's now offer "bank" accounts.

Your post gives the impression that Buiding Society ''bank'' accounts (current accounts) are something new. Nationwide B.S. (formerly Nationwide Anglia) has been offering FlexAccounts for around 23 years.