Coventry Building Society has launched two Poppy savings products that donate a percentage of money saved to the Royal British Legion.
The Poppy savings range comprises a three-year cash Isa and a three-year bond, both paying 1.7% AER.
Coventry Building Society will donate 0.15% of balances invested by the end of this year to support current and former members of the armed forces through the Royal British Legion.
Here, we look at how the products compare with similar accounts, and reveal other ways you can give charitable causes a boost with your savings.
How do the Poppy savings accounts work?
The 0.15% donation will be based on Poppy account balances on 31 December 2019. But this is separate from the interest you receive, so your savings balance won’t take a hit in order to fund it.
The more you save, the more you’ll boost Coventry’s charitable donation. If you were to deposit your full Isa allowance of £20,000, that would mean £30 for the Royal British Legion.
Coventry will also make a donation to Poppyscotland to reflect the percentage of Poppy accounts held by customers in Scotland.
This is the 11th year that the building society has launched a Poppy range to coincide with Remembrance Sunday. It has raised £17m through these accounts since 2008.
Last year, Coventry Building Society’s Poppy accounts raised £1,663,789 for the Royal British Legion.
How good are the Poppy account rates?
The interest rate for both the Isa and the bond is 1.7%. They are both fixed for three years, meaning you’ll have to lock your money away for that period before you can make any withdrawals.
Compared with other fixed three-year savings accounts and bonds, the rate is good but not exceptional.
According to data from Moneyfacts, the average interest rate for three-year fixed savings is 1.51%. There are nearly 30 other products that beat the Poppy accounts, although not many of them are Isas.
Best three-year savings accounts by rate
These are the best three-year fixed savings accounts, according to data from Moneyfacts. Links take you to more details about each account on Which? Money Compare.
- Al Rayan Bank 36-Month Fixed-Term Deposit, 2.32% Expected Profit Rate (EPR)
- Bank of London and the Middle East (BLME) 3-Year Premier Deposit Account, 2.25% EPR
- Gatehouse Bank, 3-Year Fixed-Term Deposit, 2.20% EPR
These accounts are sharia-compliant products, and so offer an expected profit rate as opposed to interest.
The 1.7% AER on offer from the Poppy bond doesn’t look too appealing compared with the rates above.
However, the Poppy Isa is more competitive, with the highest rate on the market only 0.02% higher than the Poppy Isa’s 1.7%:
Best three-year cash Isas by rate
These are the highest-paying three-year Isas. Again, links take you to further details on Which? Money Compare where available.
- Charter Savings Bank 3-Year Fixed-Rate Cash Isa, 1.72% AER
- Family Building Society 3-Year Fixed-Rate Cash Isa, 1.71% AER
- Virgin Money 3-Year Fixed-Rate Cash Isa, 1.71% AER
How can I open a Poppy account?
You can open an account over the phone, by post, in a Coventry Building Society branch or online.
But if you do want to open one, it may be wise to act quickly. Coventry told us that Poppy accounts are usually popular and therefore only available for a few weeks.
It is perhaps surprisingly common for top-rate savings accounts to close quickly. In August, Which? revealed that hundreds of accounts disappear less than two weeks after they go on to the market.
- Find out more: vanishing top-rate savings accounts
How else can your savings fund charity?
If you’re looking for an alternative way to fund charity with your savings, or would prefer to support a different cause, there are a few options.
Coventry has a range of ‘supporters accounts’ that donate 1% of balances to one of five small UK charities each year.
Leeds Building Society has a scheme called Your Interest in Theirs, which lets savers donate to local communities and charitable causes, including the Samaritans.
You could alternatively save with Charity Bank, which invests money from its savings accounts to support charities and social enterprises.
A number of different ethical banks offers savings accounts with competitive rates. However, it’s worth checking carefully where your money will be invested in case the bank’s idea of ‘ethical’ does not align with yours.
- Find out more: how to choose the best savings account
Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of the savings account provider before committing to any financial providers.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Money Compare is a trading name of Which? Financial Services Limited.