Coventry Building Society has today launched the fourth issue of its 1st Class Postal savings account, paying a market leading rate of 3.15%.
Available from Friday 29 January, it pays a rate of 3.15% AER (variable) on savings – although this new rate is 0.15% lower than the AER payable on the previous issue of the same account.
Coventry’s new offering includes a 1.15% AER bonus, payable during the first year the account is open. The account can be opened by phone, online or in branch, but can only be operated by post. Savers will also need an initial deposit of at least £1,000 to open this account.
While its competitive interest rate is likely to mean the 1st Class Postal account proves popular, it’s worth noting that the deal comes with limitations which have prevented it from achieving Which? Best Rate status.
Best Rate savings accounts
Savers with a Coventry BS 1st Class Postal account will be able to access their savings just four times a year without paying a penalty. In addition, all withdrawals from the account must be by cheque and for a minimum of £1,000.
Additional withdrawals from the account are permitted without notice, but are subject to a charge equal to 50 days’ interest on the sum taken out.
These conditions mean that while the 1st Class Postal account offers an attractive rate of interest, it doesn’t meet the stringent criteria Which? has set for Best Rate savings accounts.
To make it onto the Which? Best Rate tables, an account must offer a market leading rate but also meet the following criteria:
- There must be no restrictions on withdrawals from instant access accounts
- All bonuses on accounts must be payable for at least 12 months
- Best Rate notice savings accounts must require a maximum of 90-days notice.
Find the best savings account for you
Which? savings and banking expert Rebecca Fearnley said: ‘This account offers a market-leading interest rate, but also sets tough withdrawal conditions that should make some savers think twice – specifically, those who may need regular access to their money.
‘It’s worth remembering that if you’re prepared to give up access to your money entirely, opting for a fixed savings account would get you an even better return on your cash. Currently, FirstSave is offering a rate of 3.65% AER on its one year fixed rate bond.
‘Having said that, the Coventry BS account offers those who aren’t willing to lock their money away a good rate – plus the opportunity to make a few large withdrawal should emergencies arise.’
You can compare Which? Best Rate instant access savings accounts and fixed rate savings accounts elsewhere on our website.
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