Which is safer, a bank or building society?

How do banks and building societies size up against each other, and which is the safer bet for your cash?

"How do banks and building societies size up against each other?" asks the Motley Fool's Szu Ping Chan. And which is the safer bet for your cash?

It all used to be so simple. Before 1986's 'Big Bang' regulations, building societies were all 'mutuals', owned by their members who were mostly savings account holders and mortgagees. They accepted savings deposits and made home loans. Banks, on the other hand, offered current accounts and personal loans, but no mortgages. As companies they could issue shares, list them on exchanges and pay dividends. That neat division ended in the mid-1980s. Suddenly, banks could offer mortgages, while building societies could offer current accounts. Further, several building societies, such as Abbey National, converted to companies and listed shares on the London Stock Exchange. Others, such as the Nationwide, remained as mutuals.

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