Building societies and banks often offer similar accounts. The main difference is who owns them, and that can shape how they operate.
Summary
- Building societies are mutual organisations owned by their members; banks are usually owned by shareholders.
- Both are authorised and regulated, and eligible deposits are protected by the FSCS up to the same limit.
- Building societies traditionally focus on savings and mortgages, while banks offer a broader range.
- Compare the specific account rather than assuming one type is always better.
Building societies and banks sit side by side on many UK high streets and often sell similar products. For most everyday decisions, the specific account matters more than the type of institution, but the difference in ownership can still be worth understanding.
How they compare
| Factor | Building society | Bank |
|---|---|---|
| Ownership | Mutual, owned by members | Usually owned by shareholders |
| Main focus | Savings and mortgages | Wide range of products |
| Profits | Typically reinvested for members | Partly paid to shareholders |
| Deposit protection | FSCS, up to the same limit | FSCS, up to the same limit |
| Regulation | Authorised and regulated | Authorised and regulated |
What mutual ownership means
- A building society is owned by its members, typically its savers and mortgage customers.
- Without outside shareholders, a society can aim to use its profits for members, for example through savings rates, mortgage pricing or service.
- Members can usually vote at the annual general meeting on matters such as board elections.
Products and services
- Savings: both offer easy-access, notice and fixed-rate accounts. Our guide to easy-access and fixed-rate savings explains the differences.
- Mortgages: a traditional strength of building societies.
- Current accounts: widely offered by banks, less so by building societies.
- Digital features: varies by provider; some banks and societies have more advanced apps than others.
Top tip
Look at the account first and the brand second. Compare rates, fees, access rules and service for the specific product you want.
Protection is the same
Eligible deposits at UK-authorised banks and building societies are covered by the FSCS up to the same limit per firm. Our guide to FSCS protection explains how the limit works when brands share a licence.
Bear in mind
Some smaller savings providers are credit unions, which are also member-owned. Eligible deposits at UK credit unions are protected by the FSCS in the same way.
Member-only accounts and eligibility
- Some building societies offer accounts or loyalty rates only to existing members.
- Some products are limited to people living in a particular area, or to those who open an account in a branch.
- Read the eligibility rules early, so you don’t spend time comparing an account you can’t open.
When the difference might matter
- You value a local branch network and a mutual ethos.
- You want a mortgage lender with a particular approach to lending.
- You prefer a wide product range, including current accounts and credit cards, in one place.
How to choose
Choose the provider whose specific account best fits your needs, whatever its ownership. If you’re weighing a newer, app-based provider, see our comparison of digital banks and high street banks.
Questions readers ask
Are building societies as safe as banks?
UK building societies are authorised and regulated like banks, and eligible deposits with them are protected by the FSCS up to the same limit.
What does being a member of a building society mean?
Savers and borrowers are usually members, which can give voting rights at the society’s annual general meeting. Check the society’s rules, as not every product confers membership.
Do building societies offer current accounts?
Some do, though fewer than banks. Many focus mainly on savings accounts and mortgages.
This guide is general information, not financial advice. Rules, rates and allowances can change, so check the latest details with the provider, GOV.UK or the Financial Conduct Authority before making decisions. For advice on your own circumstances, speak to an FCA-authorised financial adviser.