Charity-conscious savers might want to take advantage of the new Coventry Building Society Poppy Isa and bond which pay 0.15% to charity
What is the deal exactly?
Coventry Building Society has launched two ‘poppy’ savings products in time for Remembrance Sunday on 10 November.
The Coventry BS Fixed Isa (2) pays 1.70% AER, fixed until 30 November 2022 – just over two years.
The Coventry BS Poppy Bond also pays 1.70% AER fixed until 31 December 2022.
The building society will donate the equivalent of 0.15% of the balance you deposit into the account. So were you to deposit £1,000, the provider would donate £1.50 to the Royal British Legion.
The accounts can be opened with as little as £1 and managed by phone, online, post or in branch.
According to financial data website Moneyfacts.co.uk poppy accounts tend to be very popular with the public, lasting on average only 18 days before providers close the accounts to new applications.
Why should I care?
Savings rates are low at the moment. Both options are, while not top rates, highly competitive in a deflationary savings rate environment.
You are also giving back at no cost by saving your money into one of these accounts. The Coventry has donated over £17 million to the Royal British Legion via these accounts in the last 11 years.
What’s the catch?
Your money won’t be accessible for over two years. If you think you are likely to need it sooner than this, you should consider an easy-access alternative.
Savers should also be aware when choosing between the Isa and the bond options. Make sure if you open an Isa that you haven’t maxed out your £20,000 allowance, or risk doing so by depositing cash into this account.
What are my other options?
The rate of return might not be enough for some savers. If you’ve got at least a five year horizon for your cash. You should consider investing in the stock market instead. For ideas of how to do this, check the Moneywise First 50 Funds for beginners.
The new accounts aren’t quite the top rate on the market at the moment. Al Rayan Bank offers 1.81% on a two-year Isa. It is an expected profit rate rather than fixed interest, but this in practice makes little difference.
Alternatively, Aldermore offer 1.60% for a two year fixed Cash Isa.
On bonds, you can get a much healthier 2.32% from Al Rayan, or 1.90% from Union Bank of India (UBL).
All of the above accounts, and the Coventry BS accounts are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).
For more best buys, check the Moneywise best buy savings pages.
Where can I find out more?
Visit the Coventry Building Society website for more information or to open an account.
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