Cheshire Building Society is a mutual institution whose members are its customers. The main business of a building society is to attract savings from investing members and to make loans for house purchase to borrowing members. Investing members provide most of the funds which borrowing members need to buy their properties. Borrowers pay interest on their loans which flows through to the investors and becomes the return on their investment. Many societies including the Cheshire offer a range of additional services, which may not involve membership, such as estate agency, insurance, and credit cards.
Societies also raise funds on the money market as well as from individual investors.
Not all of the money invested in the Society is lent on mortgages - some is kept aside so that investors can withdraw their money when they want it in accordance with the terms of their accounts. Building society members fall into two categories, borrowing members and investing members. A borrowing member is an individual who is indebted to the Society with a loan that has been secured or substantially secured on property. A building society investment is different in many respects from a company share. In a company, the value of the shares can rise and fall, and the income from the shares is not known until the company declares what the dividend is going to be.