A study published this week has revealed that building societies are best, at least when it comes to paying out interest to savers.

The International Institute of Banking and Financial Services, which is part of Leeds University, reported that building societies paid the highest interest rates on the majority of both instant access and non-branch-based accounts.

The researchers at the institute looked at the average rate of interest paid by a sample of all three types of organisations on seven different sized deposits ranging from £50 to £50,000 between January 2001 and December 2001.

As far as branch-based instant access accounts are concerned, savers got the best returns from building societies at all seven different deposit levels, with mutually owned societies returning an average of £20.34 more than banks to people who deposited £5,000.

For non branch-based accounts, which includes Internet and telephone accounts, Building Societies still dominated the list of the best payers, providing the best returns on six out of the seven deposit levels, and paying £104.25 more in interest than banks on a £5,000 deposit during the period.

Gary Boyes, senior research fellow at the institute, says: "Building societies are the small saver's best friend. Their branch-based products continue to outperform those of the high street and mortgage banks in all categories, while their remote products are also superior, even to those offered by the supermarkets and remote banks."

This is the second piece of supporting news that the institute has offered this year to those who are against the activities of carpetbaggers. An earlier study in January showed that building societies also come out tops when it comes to instant access accounts and notice accounts.