See if this building society could help your family save
The Family Building Society is the baby of the building society sector, having launched in 2014.
It was created with the idea that families could help one another get mortgages and loans. For example, parents and grandparents could act as mortgage guarantors. This way they could help their younger relatives get on the housing ladder without directly giving their money away.
Here we look at the savings account options from the Family Building Society.
What savings accounts does it offer?
- Easy access
- Children’s savings
What is a building society?
A building society is a financial institution owned by its members. Building societies offer banking and related financial services including mortgages and savings.
Whereas banks are normally listed on the stock market and run for their shareholders, building societies aren’t. Because they don’t have shareholders to pay, building societies have historically claimed to offer better interest and cheaper mortgage rates than banks.
- Easy access, with up to 12 withdrawals available in a calendar year without charge
- Apply online, by post or at its Epsom branch
- Put in anywhere between £500 and £250,000. You’ll get interest tax-free up to your annual ISA limit
- Variable interest. Could go down or up
- Could also get the market tracker cash ISA. Essentially offers the same limits, although the minimum withdrawal with the market tracker is £100. However, you do get unlimited withdrawals and the interest rate is fractionally higher
35-day notice cash ISA
- Easy access, flexible cash ISA. Give the building society 35 days’ notice and you can take money out of your account
- Interest paid annually on 30 September
- Interest rate is dependant on how much you put in. For smaller savers you’re better off with the market tracker. Bigger savers will do better with this ISA
- Save from £3,000 to £250,000: this account isn’t for anyone looking to squirrel away a few pennies every month
- You can add to your ISA whenever you like
Fixed rate cash ISA
- Most of its fixed rate ISAs are only available if you have had an ISA with the Family Building Society since 1 May
- This applies to its 1-year, 2-year and 3-year long fixed ISAs
- 5-year fixed rate cash ISA is available to all new and existing customers, though
- Only use these options if you’re happy locking your money away for a fixed term. There are no withdrawals prior to term maturity
- Interest rates are higher than with flexible accounts, though
- Save up to £250,000
- Apply for this type of account by post or head into its branch in Epsom
What is a cash ISA?
A cash ISA is a savings account where you don’t pay tax on the interest you earn. There’s a limit on the amount you can deposit into ISAs each year, which is set by the government.
- A unique saver which lets you win prizes as you earn interest
- A bond costs exactly £10,000
- Each month one bond will give you the chance to win 10 prizes of £1,000, 2 prizes of £10,000 or 1 prize of £50,000
- The more bonds you hold the greater your chance of winning
- With one bond your chance of landing a windfall are 64/1 in the first 12 draws
- Apply for an account online, by post or at its Epsom branch
- The interest rate isn’t the best, though. You earn a variable rate of interest which is linked to the Bank of England rate
- There are no additions or partial withdrawals allowed
35-day notice saver
You could also take a look at the regular 35-day notice saver. It’s similar to the 35-day ISA; however, it obviously doesn’t have the same tax benefits while its interest rates are lower too. It does have a lower deposit amount of £1,000.
Easy access savings accounts
The building society offers five different easy saver accounts: the premium, the market tracker, the everyday saver, the branch saver and the online saver. Here are a few key factors you should consider when choosing between them:
- Different interest rates. Each of these savings accounts give varying rates of interest. The premium offers the highest return. The branch and the everyday offer the lowest.
- Variable interest. All the regular savers have variable interest rates, so they might change.
- Varying deposit limits. The regular savers have varying amounts you can save. With the premium you have to put away between £5,000 and £250,000. The other savers are more inclusive, though. The branch saver even lets you put away between £1 and £1 million.
- Ease of access. The premium, online and branch accounts let you take money out whenever you like and however many times you like. The market tracker saver lets you take money out 20 times a year, while the everyday saver gives you 12 withdrawals every calendar year.
Fixed term bonds
The Family Building Society offers two fixed term bonds. Given the lack of access, these bonds are best for anyone looking to put away a lump sum to grow. They are the 2-year tracker rate bond and the 5-year tracker rate bond.
- Save up to £250,000 with either of these choices
- No early withdrawals or closure
- No additions either. In effect you’re putting a lump sum of money in a vault, with no access
- Higher interest returns
You can also get two different junior saving options with the Family Building Society: either the no access ISA or the easy access Junior Saver.
- With the Junior Saver you get 12 withdrawals a year without charge
- With the Junior Saver account you can save between £1 and £25,000
- With the Junior ISA you can save up to £4,260 tax-free
- Better interest rates with the ISA too
- However, you can’t withdraw or close the account until the account holder turns 18
How safe is Family Building Society?
The Family Building Society is authorised and regulated by the Financial Conduct Authority. It’s also covered by the Financial Services Compensation Scheme, so if the bank goes bust your savings are protected for up to £85,000.
However, it’s important to remember the FSCS compensation only covers an individual group. So, because the Family Building Society is part of the National Counties Building Society, you’d only be covered for a total of £85,000 for any savings you have split between the two.
You wouldn’t be protected for £170,000 just because your savings are spread across the two building societies.
What are the pros and cons of saving with Family Building Society?
- Online banking. Apply and manage your accounts online. Although there isn’t an app, you can check balances and transactions, make withdrawals to your nominated account and transfer money between your Family BS accounts online.
- Flexibility. Family Building Society has loads of different account options, whether you’re looking to save a few quid or larger amounts.
- Better rates elsewhere? Rates are average across the board. It might be worth looking at other savers.
- No high-street presence. Unless you live near Epsom you can’t visit a physical branch. If you still like a personal touch when banking, the Family Building Society might not be for you.