What is the Difference Between Bank and Building Society?

The main difference between a bank and a building society lies in their ownership structure and focus on financial products. Here are the key differences:

1. Ownership: Banks are typically owned by shareholders and are listed on the stock market. Building societies, on the other hand, are owned by their members, making them 'mutual institutions'.
2. Focus on Financial Products: Building societies mainly focus on savings accounts and mortgages, while banks offer a broader range of financial products and services.
3. Interest Rates: Building societies tend to offer higher interest rates on savings accounts compared to banks, as they are not publicly traded and do not aim to maximize profits for shareholders.
4. Customer Involvement: Building societies allow their members to have a more significant say in their decision-making processes, which can result in a more personalized service.
5. Geographical Presence: Banks usually operate across the whole of the UK or even globally, while building societies may be restricted to customers within specific postcode areas local to the society.

In summary, banks are generally larger financial institutions owned by shareholders and offer a wider range of products and services. Building societies are smaller, member-owned institutions that focus on savings accounts and mortgages, offering higher interest rates and more personalized services. Your choice between a bank and a building society will depend on your preferences, such as the range of products and services you require and your desire for a more personalized service.

Comparative Table: Bank vs Building Society

The main differences between a bank and a building society are their ownership structure, products, and services offered, as well as their focus and convenience. Here is a table summarizing the differences:

Both banks and building societies are regulated equally and offer the same level of protection for your money. The choice between a bank and a building society depends on your specific needs, such as the range of products and services you require, your location, and your preference for a more personalized service.