Building societies outperform banks – yet again

18th January 2018

We have recently carried out some research into the rates being offered to customers of banks versus building societies. Comparing the two groups as a whole, building societies continue to outperform banks in key areas.

This continues the trend that we have seen over the last six years and remained the case throughout 2017. 



The research, which was based on a balance of £10,000, found that significantly more building society accounts (71%) pay a higher rate than the base rate, compared to banks (47%).
 

While rates on the whole are lower than they were six years ago - as savers continue to struggle in a low-interest savings environment - the average variable rate paid by banks has dropped by nearly 10% more than the average rate paid by building societies over that six year period.

During 2017 the average variable interest rate paid by building societies was over 25% higher than the banks, showing a clear gap between the two groups.

It is clear when you look at these figures that, on the whole, building societies are showing greater support for savers than banks. Building societies overall pay higher interest rates and demonstrate a greater commitment than banks to treating savers fairly.

 

Of course, these are overall figures and there are exceptions within each group.

 

As we report, week in, week out, the challenger banks, in particular, continue to drive competition in the savings market and dominate the best buy tables.

 

But while challenger banks are pushing the group averages up, the big high street names are doing the opposite and they continue to pay some shockingly low interest rates. With a significant portion of savers' funds still languishing in uncompetitive accounts with high street names, now is the time to vote with your feet and look for an alternative.

 

Whether you have your money with a bank or a building society, the key is to check the rate you are earning and how it compares to the best rates on offer.

 

Savings Champion is here to support savers and make this task easier with independent best buy tables and the Rate Tracker service, where you can check the interest rates on your accounts for free.

 

As always, our advice is to not accept low-paying accounts, but switch to a higher paying alternative. Providers that are not rewarding your loyalty with decent returns do not deserve to keep your business.

 

 

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