Sizeable increase in building society deposits

According to a recent report there has been a sizeable increase in the level of building society deposits being made in the UK over recent months. It is thought that this is the result of better savings interest rates being offered by many financial institutions and the determination of many consumers to be more prudent and try and put money aside in the current difficult financial climate.

Since the onset of the global credit crunch many lenders have seen their lending capacity reduced greatly due to difficulties in raising finance on the wholesale money markets. As a result many have tried to get savings deposits rolling in by offering better deals on interest rates to those putting some money aside.

The level of deposits in building societies is said to have rocketed by around 63% according to recent data. A number of High Street banks have also reported an increase in savings deposits.

An official from the Building Societies’ Association said: “With an uncertain economic outlook and stock market turbulence, savers are wisely viewing building societies as excellent homes for their money.” He added: “Many societies have chosen to follow a conservative lending policy to ensure that they maintain the high quality of their loan books.”