So many people think that the banking and building societies are the same. Yes, it’s the same. But each service will follow different principles. People must be aware to invest their money in getting loans from these platforms. Moreover, you can see the advantages and disadvantages between these Bank and Building Society services. I hope this guide will help you choose the place where you want your money. Here this post, will explain the basic detail about Bank and  Building Society?

Bank and Building Society

What is a Bank?

A Bank is a financial institution that provides Money for the Public. These financial institutions have two types –  One is in the private sector and the other is in the government sector. So you can borrow money from this financial institution to fulfill your basic needs. Also, there are various benefits available. Benefits like, you can setup a salary account, setting up direct debits, arranging overdrafts, mortgages, loans, and more. Though there are hundreds of Banks available in the Global market. But choose the Government bank to get more.

What is Building Society?

The Building Societies are mutual institutions. A building society owned by the account holders, each of whom has a vote will become a member. All these members will own the Construction trades, real estate, and more. Building Society is mainly focused on savings and mortgage lending. Your money will be used for lending to the borrower as a loan. The borrower pays the loan with the interest cost. The extra money which is made from the Interest is a profit. This is how the Building society works.

Advantages and Disadvantages of Bank and Building Society

To know, in-depth about both Banks and Building societies – You should know the advantages and disadvantages of the particular institution. Also, knowing the difference between a Bank and a Building Society – The pros and cons of both will help you to know more.

Difference of Bank and Building Society – Pros&Cons of Bank

Pros of Bank
Cons of bank
  • You will get different accounts from one single Bank. For example: Current Accounts, Rewards Accounts, and Savings accounts.
  • You will get a loan according to your employment salary or dividends from the business.
  • You can use the bank account to borrow Funds.
  • The low interest rates give a very low return on your money.
  • Earn interest on your Credit Balance and get returns on Deposits.
  • You won’t be able to get an Overdraft -if your financial health is low.
  • You can use your bank account and access the safety locker of the particular bank. You can keep important documents, Gold, and others in a safety locker.  Safety locker will be protected by the Financial Services Compensation Scheme.
  • Bank Fees can be high particularly to maintain your Funds. Also, the fee rate will change -depending on banking norms.

Bank and Building Society – Pros& Cons of Building Society

Pros of Building Societies
Cons of Building Societies
  • You can get Higher Interest rates for Mortgage.
  • You may receive Penalties for early withdrawal.
  • These institutions are owned by their members.
  • It has only Limited investment Opportunities.
  • Building Societies are very safe to invest your Money.
  • These building societies are restricted for some specific regions.
  • It doesn’t need any pay dividends like Commerical banks.
  • There is a limit of accounts available on this platform.

What’s the Key difference of Bank and Building Society?

The main key difference between the Banks and Building society – that banks will appear on the Public stock market. Whereas the Building Society will not listed in the Stock market. Therefore, when you are investing in the Stock market, you should have invested with the financial institution to get Dividends. Also, the bank has the shareholders whereas the Building society does not. This is the only key difference of the Bank and Building Society.

How to choose between a Bank and Building Society?

You can choose any of these institution based on your need. From my point of view, I would prefer the bank. Because the Bank will secure all your collateral securities, ornaments, and more. Also, you will receive some rate of interest on depositing some cash on it.

Why Should I Choose Bank – When to Use Bank?

You can choose the Bank – Because many banks are listed companies. Many banks are available at the Global level with a hundred branches. In some banks, the interest rate for loans will be low. Apart from these, you can choose a Bank based on your needs and requirements.

Why should I choose Building Society? When to Use Building Society?

People can enjoy better interest rates by selecting the Building Society. Most people can select this Mutual institution because they are more in tune with the ISAs, Mortgages, and loans. Some Building societies are not available globally.

Closing Off

I hope, Now you guys know about the Bank and Building Society. Both are the safest places to keep your Money. But you need to check the interest rate, and security, and compare the features. You can decide which is more comfortable for you. We have mentioned the Advantages and Disadvantages of these Bank and Building Society Service platforms. If you have any doubts related to this Guide, Let me know in this comment section.