Building societies are winning over savers - Savings - News - Moneyfacts


Building societies are winning over savers

Building societies are winning over savers

Category: Savings

Updated: 23/11/2015
First Published: 23/11/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savings rates aren't exactly setting the world on fire, and many people have been left wondering just where they can go to get a decent return. Well, it seems that building societies could be the sensible solution, with mutuals paying rates that far outweigh those from the main high street banks.

Savers deserted by the big banks

The figures speak for themselves. Our data shows that the main banks (which include Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, NatWest, Royal Bank of Scotland and Santander) have enforced multiple rate cuts in recent months, causing their savings accounts to drop lower and lower in the market.

However, building societies have used this to their advantage by offering savers a local alternative to the mainstream banks. We've compared the current savings offerings of building societies and banks and found that building societies are the irrefutable winners, as is highlighted in the table below:

Main Banks

Building Societies



Average Easy Access Rate




Average One-Year Fixed Rate Bond




Average Two-Year Fixed Rate Bond




Average Cash ISA




Compiled: 23.11.15

As you can see, the difference is marked, with building societies offering rates that can be as much as 0.58% higher than their big bank counterparts, so it could be time to look a bit closer to home if you're in need of a decent savings account.

"It's shocking that some of the UK's most well-known and trusted brands are paying savers dismal rates of interest," said Charlotte Nelson, finance expert at Moneyfacts, "but building societies are stepping up to the challenge. For example, the top-paying easy access account from a mutual, which comes from Skipton Building Society, pays 1.40%. Halifax, on the other hand, offers just 0.80% – a significant 0.60% less.

"There is a stark difference between what savers could earn from a building society compared with a main bank, and not only do mutuals come out on top when it comes to rates, but the gap between their deals and those from banks is getting wider. This gives savers a clear indication that they may need to look away from traditional banks to get the best deal."

What next?

Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Average five-year fixed bond rate falls below 2%

Long-term fixed rate bonds used to be the top solution for savers looking to get a decent return on their savings, but unfortunately, times have changed, with our latest data revealing that the average five-year rate has fallen to a new record low.

Savings rates plummet to fresh lows yet again

It’s becoming a recurring theme, and unfortunately, it’s showing no signs of stopping. Savings rates have plummeted to fresh lows once again as the impact of the base rate cut continues – and this month, product availability has followed.

Less than half of savings accounts beat inflation

Official figures show that inflation jumped up during September, with CPI rising to 1%. Not only does this mean that consumers may begin to feel the impact on their wallets, but there are now far fewer savings accounts that will beat inflation.