building society

Traditionally, a financial institution that accepts deposits, upon which it pays interest, and makes loans for house purchase or house improvement secured by mortgages They developed from the Friendly Society movement in the late 17th century and were non-profit-making with mutual status. These institutions can be found in the UK, Australia, South Africa, Ireland, and New Zealand. The US savings and loan associations are broadly similar organizations. In the UK, the Building Societies Act (1986) greatly widened the range of services they are permitted to offer; this has enabled them to compete with the commercial banks in many areas. They offer cheque accounts, which pay interest on all credit balances, cash cards, credit cards, loans, money transmission, foreign exchange, and valuation and conveyancing services. The distinction between banks and building societies is fast disappearing; indeed many building societies have obtained the sanction of their members to become public limited company This means that they become profit-making banks, owned by their shareholders, instead of non-profit-making societies owned by subscribing members. These changes have led to the merger of many building societies to provide a national network that can compete with the Big Four banks. Competition is well illustrated in the close relationship of interest rates between banks and building societies as they both compete for the market's funds. Moreover, the competition provided by the building societies has forced the banks into offering free banking services, paying interest on current accounts, and Saturday opening. Similar changes have taken place in all the other countries that have building societies. The UK building societies are now regulated by the Financial Services Authority

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • building society — building societies N COUNT In Britain, a building society is a business which will lend you money when you want to buy a house. You can also invest money in a building society, where it will earn interest. Compare savings and loan association …   English dictionary

  • building society — a financial institution whose purpose or principal purpose is that of raising, primarily through the subscription of its members, a stock or fund for the making of loans secured on land for residential use governed by the Building Societies Act… …   Law dictionary

  • building society — ► NOUN Brit. ▪ a financial organization which pays interest on members investments and lends capital for mortgages …   English terms dictionary

  • Building society — Nationwide Building Society is the UK s and the world s largest building society A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services,… …   Wikipedia

  • building society — noun British equivalent of United States savings and loan association • Hypernyms: ↑savings and loan, ↑savings and loan association * * * building society, British. a savings and loan association. * * * noun, pl ⋯ ties [count] : a British… …   Useful english dictionary

  • building society — A form of mutual organisation owned by its depositors and borrowers. Their original purpose was to take deposits and recycle these as mortgage loans for buying houses. However, modern large building societies have extended their role such that… …   Financial and business terms

  • building society — / bɪldɪŋ səˌsaɪəti/ noun a financial institution which accepts and pays interest on deposits, and lends money to people who are buying property against the security of the property which is being bought ● We put our savings into a building… …   Dictionary of banking and finance

  • building society — UK / US noun [countable] Word forms building society : singular building society plural building societies a) a financial organization in the UK in which people invest money to earn interest, and from which they can borrow money to buy a house or …   English dictionary

  • Building Society — A type of financial institution that provides banking and other financial services to its members. Building societies resemble credit unions in the U.S. in that they are owned entirely by their members. These societies offer mortgages and demand… …   Investment dictionary

  • building society — noun Building society is used before these nouns: ↑account, ↑deposit …   Collocations dictionary

  • building society — building so.ciety n BrE a type of bank that you pay money into in order to save it and earn interest and that will lend you money to buy a house or apartment American Equivalent: savings and loan association …   Dictionary of contemporary English

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