What does mutuality mean?
A mutual society is run in the interests of its members, the savers and borrowers – and is not listed on the stock market or owned externally. The key advantage of this over a stock market listed or ‘plc’ bank is that a mutual does not have to pay dividends to its shareholders. This means that profit a society makes can be put back into the organisation to benefit its members, through competitive interest rates and improved services. A building society’s board of directors in effect act as trustees, holding the society’s assets in trust so that future members also have access to cheaper mortgages and attractive savings accounts.
