Building Societies Flashcards

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What is a building society?

A financial institution owned by its members. It takes savings and gives home loans called mortgages.

Who owns a building society?

Its members, who are its customers. There are no outside shareholders.

What two main services do building societies offer?

Savings accounts and mortgages.

How do building societies use savers' money?

They pool the money and lend it to home buyers as mortgages.

How is a building society different from a commercial bank?

It is a mutual, owned by members. Profits aim to benefit members, often through better rates.

What does 'mutual' mean for a building society?

Members are the owners and can vote. There are no shareholder owners.

How can members take part in running a building society?

They can vote at the Annual General Meeting (AGM) and elect directors.

What type of loans do building societies mainly provide?

Residential mortgages to help people buy homes.

Where do building societies get most of their funds?

From members' savings deposits.

Name one advantage of using a building society.

It may offer better interest rates or lower fees because it is member-owned.

Name one possible drawback of a building society.

It may offer fewer products or have fewer branches than big banks.

Are savings in UK building societies protected?

Yes. The FSCS protects up to £85,000 per person, per firm.