People saving with building societies earned £920 million in additional interest on their savings in 2018 than if they had earned the average interest rates paid by large Monetary Financial Institutions, a group mainly comprising the big banks.

This means that since 2016 building society savers have benefited by a total of over £2.3 billion in additional interest, compared to what they would have received on the average interest rates offered by the major banks.

Longstanding customers better off

These figures are based on the average interest rates on the total stock of outstanding savings deposits, so indicate that savers with building societies were getting a better deal than they would have got at banks, even if they are longstanding customers.

Effective interest rates

The BSA collated interest rate data from building societies on the same basis as the Bank of England does for its Effective Interest Rates series.

The average rate offered by building societies in 2018 on so-called time deposits (including fixed rate, notice accounts and Cash ISAs) was 1.26%, compared to 0.91% at Monetary Financial Institutions.

On sight deposit accounts, where savings can be withdrawn on demand without penalty, the average rate was 0.89% at building societies, compared to 0.47% at Monetary Financial Institutions (within which, current accounts had an average effective rate of 0.45% in 2018). By way of comparison, the official Bank Rate increased from 0.50% to 0.75% in early August 2018, so averaged 0.60% across the year.

Notes for information