March 30, 2023

Coventry Building Society has launched a new best-buy, easy-to-access savings deal that pays 2.85 per cent.

The limited-access deal jumps right to the top of our top independent best-buy savings charts, overtaking Al Rayan Bank’s 2.81 percent rate.

Savers can open an account with as little as £1 and are free to deposit up to a maximum of £250,000 – although, as with all savings accounts, only up to £85,000 is protected by the Financial Services Compensation scheme.

There is also a catch. Savers can withdraw money from the account up to six times a year without paying any fees.

Top position: Coventry Building Society has launched a new best-buy, easy-to-access savings deal with a 2.85% payout

From the seventh withdrawal, the savers will receive a compensation equal to 50 days interest based on the amount withdrawn.

If they stay within the limit, someone who puts £10,000 into this account can expect to see £285 in interest after a year.

While this is a far cry from the current inflation rate of 11.1 percent, it is a much higher rate of return than what most people will earn on their easy savings right now.

– Check out the best easily accessible savings rates here

There is a total of £428 billion in easy access savings accounts paying 0.5 per cent interest or less, according to Paragon’s Bank’s report on the latest Caci data.

Caci analyzes deposits at major banks, using data from more than 30 providers based on individual adult cash savings.

There is a total of £1,003 trillion in deposits with these providers, so that figure of £428 billion suggests that not far from 40 per cent of savers are leaving their money idly in low paying accounts.

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A spokesperson for The Savings Guru said: ‘This is a big move from Coventry Building Society this morning.

“It’s actually a decent account and a six-withdrawal limit isn’t a huge constraint as a constraint for most savers.”

Is Coventry’s account right for you?

As the UK’s second largest mortgage bank, Coventry’s size and stature will appeal to some savers.

But whether this is the right savings account for someone depends on the use of the savings account.

Savers looking for an easily accessible account to use as an emergency fund for one-off unexpected events may see the appeal of this account.

However, for depositors who need to put in their money on a regular basis, the restricted access element may mean it’s not the account for them.

Those looking for an easily accessible deal with no restrictions should consider Al Rayan Bank’s 2.81 percent offer.

Savers can open an account with just £1 and are free to deposit up to a maximum of £250,000

Al Rayan is a sharia-compliant bank, which means that instead of listing interest rates, it specifies how much profit depositors earn through an ‘expected profit’ rate – although the outcome for depositors is the same.

Like every savings provider at our best buy tables, cash at Al Rayan is protected up to £85,000 per person.

Another possible option for savers looking for pure ease of access are the three app-based banks, which This is Money tested earlier this year.

Atom Bank and Tandem Bank both pay 2.55 percent in easy access, while Zopa Bank pays 2.4 percent.

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Will interest rates rise again?

After months of consecutive interest rate hikes and new best buys almost every week, savings rates seemed to hit a wall last month.

The best low-threshold savings rates have largely remained the same. Aldermore briefly launched a 2.75 percent easy access deal and a 3 percent dual access deal before quickly closing applications for both.

Meanwhile, fixed rate savings deals have fallen. The best one-year deal paid 4.65 percent in early November. Now the best deal pays 4.35 percent.

>> View the best deals with a fixed rate here

According to the Savings Guru, savers should expect fixed interest rates to fall further. However, the easily accessible deal should start ticking away ahead of a further hike in base rates on Dec. 15.

The Savings Guru spokesperson says: “I was expecting more moves next week, with some providers anticipating a predicted rise in base rates.

“We will certainly see further increases in easy access and I am confident we will see 3% either in the week leading up to the December 15 base rate announcement or the week after.

“The base rate is expected to go to 3.5 percent, so we’ll see the best bargains move up from the current range of 2.4-2.85 percent to something more like 2.75 percent to 3.2 percent.

‘At the same time, we see fixed rates falling. The best year is down 0.25 percent in the past four weeks and will fall further.

“So easy access rates are likely to look even more attractive as they rise and flat rates decline.”

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