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Building societies set to woo savers

Building societies set to woo savers

Category: Savings

Updated: 13/09/2010
First Published: 13/09/2010

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 It is now over 6 months old so the content may be out of date.

Savers have been told they could be the big winners as building societies continue to alter the way in which they raise money to fund their businesses.

A new report from KPMG said that building societies have held up well during the recent difficult market conditions.

Two thirds of the UK's building societies reported increased profits at their last year end, while the last couple of months have seen strong interim results from three of the largest societies: the Yorkshire, Coventry and Leeds.

However, the report said that, following the credit crunch, societies had faced a sharp increase in the cost of raising funds on the money markets to fund their mortgage lending activity.

As a result, KPMG predicts that building societies will become increasingly reliant on savers' deposits to keep their mortgage business ticking over.

And therefore, the accountancy firm expects to see an ever increasing battle between the societies to attract savers' attention and their money.

It is thought more societies will offer simple current account facilities in an attempt to draw more money in, while it seems reasonable to suggest that interest rates on building society savings accounts could rise too.

Many building societies already offer a range of competitive savings accounts, including the Chelsea BS E-Saver Reward account, the Coventry BS Fixed Bond, and Nationwide's Three Year E-bond and Stepped Rate E-bond.

However, it appears that things could soon get even better.

Keep an eye on for all the latest savings deals from both building societies and the banks to help you to make the most of your money.

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