Building societies and banks have become so alike that many of us can't distinguish between them!
The swathe of demutualisations since 1989 has not helped either, and a study by Fool.co.uk shows we need to beware of any preconceived ideas we may have to avoid making costly mistakes!
- 6 out of 10 of us would prefer to take out a mortgage with a building society than a bank
- 4 out of 10 of us reckon building societies have our best interests at heart
- 62% of us would rather discuss our personal finances with a building society than a bank
The findings show that 9 out of 10 of us see banks
as being motivated solely by profits!
Perhaps that is why only 2% of us would rather talk to a bank than a building society about our finances?
A majority of us also say we would prefer mortgages provided by building societies, and 26% agree that banks offer us a wider range of products.
More worryingly, 33% of us readily admit that we don't know the difference between banks and building societies!
It appears that some 18 years after Abbey National was demutualised, 15% still think of it as a building society and 26% believe that Alliance & Leicester is still a building society too.
46% didn't know that Cheltenham & Gloucester is a bank, even though Lloyds TSB acquired it in 1994, and 33% of us think that the Woolwich, which was bought by Barclays ten years ago, is a building society.
Oh, and Bradford and Bingley converted to being a bank around the turn of the Millennium!
David Kuo, Head of Personal Finance at Fool.co.uk, says:
"Arguments over whether building societies are better than banks will probably continue until the last mutual society converts to a bank. But that is unlikely to happen for some time given that only one in four people are in favour of demutualisation."
"However, questions have to be asked about whether consumers have been guided by mis-directed loyalties. Best-buy tables have indicated that banks provide better products than building societies in three key products areas, namely credit card, savings accounts and mortgages.
"It seems that many of us are happy to cling on to the schmaltzy notion that building societies have our best interests at heart. But there is nothing romantic about paying more interest than you need on your credit cards and mortgages, and earning less interest than you deserve on your savings; just oodles of financial heartache."
So bank or building society? Which is it to be?
Clearly many of us seem to trust building societies more, but how many of them are now banks?
Perhaps it's time we asked where exactly are we putting our hard earned money?
Who is Britain's worst bank?