Coventry Building Society launches lottery-style savings account paying 6.25%

Coventry Building Society has become the latest provider to lure savers with tax-free cash prizes of up to £500 every month, alongside a competitive interest rate of 6.25%.

The Sunny Day Saver is available from 1 September 2024 and is designed for savers looking to put away small sums each month. 

Here, Which? digs into the details and explains how it compares to premium bonds and other prize-draw savings accounts.

What you need to know 

You can open a Coventry Building Society Sunny Day Saver in a branch, via the telephone or online with as little as £1, though you will only be entered into the monthly prize draw if you’ve added at least £10. The maximum you can save is £150 per calendar month for the 12-month term. 

There will be 20 winners for each of the 11 prize draws, meaning 220 winners every month. Prize funds are tax-free, but any interest earned in the savings account may be subject to income tax. You don’t need to put money in every month, but you'll only be entered into the monthly prize draw if you’ve added at least £10. 

Regardless of whether you win, you earn 6.25% interest on the balance. Interest is variable, meaning it could fluctuate over time, and is paid annually. It's worth noting that the best regular saver at the time of writing is from Virgin Money and pays 10.38%, though a rate of 6.25% is still fairly competitive. 

Sunny Day Savers mature into an Easy Access Saver after a year. The account pays 2.85% from 3 September 2024.  

• How much can you win? There will be 20 winners for each of the 11 monthly prize draws: 1 x £500, 5 x £200 and 14 x £50 cash prizes (paid into your Sunny Day Saver account). You earn 6.25% variable interest on the balance. 
• How do you enter? You have a chance of winning a prize in any month you save at least £10, but the maximum you can save is £150 per month.
• Other terms? You must be 18 to apply for the account and can only be named on one Sunny Day Saver, whether the account is opened in sole or joint names. The account is available across the UK.

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Is Coventry Building Society a good provider?

Coventry Building Society is a Which? Recommended Provider (WRP) for savings.

It achieved an above-average customer score of 79%. Savers gave it high ratings for its customer service, application process, regular communications, and transparency of charges and penalties.

It is the only WRP for savings with a branch network.

• Find out more: the best savings providers in 2024

Are there better prize-draw savings accounts? 

Coventry Building Society isn’t the only provider to offer a lottery-style savings account, so take a look at other options to see if they are a better fit.

The most like-for-like comparison was the Nationwide Start To Save Account (Issue 2), another regular savings account. However, this is no longer on sale. 

Remember, the chance to win a cash prize may come at a cost. You may find that you can bag a better interest rate elsewhere, or you may earn no interest at all, meaning your savings would lose value over time due to inflation.

Halifax/Bank of Scotland Savers Draw

Halifax and Bank of Scotland have also been running a monthly prize draw for retail savings customers since 2011, with a chance to win up to £100,000. 

Be warned that the big high street banks tend to offer much lower interest rates than challenger banks and smaller providers, so it may not be worth sacrificing a better return for a chance to win a prize. 

• How much could you win? 3 x £100,000, 100 x £1,000 and 1,500 x £100 every month (with the occasional ‘superdraw’ for bigger cash prizes). You earn interest on the balance at the rate of your chosen savings account. 
• How do you enter? You must hold at least £5,000 in a qualifying Halifax or Bank of Scotland savings account (excludes accounts for children, such as the Junior Cash ISA or Kids' Saver; and non-personal accounts, such as those for a club, charity or business) for a whole calendar month to be entered into the following month’s prize draw. You must register to take part – online, over the phone or in a local branch – and, if you have a joint account, each account holder must register separately.
• Other terms? You must be 18 and live in England, Wales or Scotland (Northern Ireland is excluded as it has different laws governing prize draws).

Find out more: is your bank short-changing you? 

National Savings & Investments (NS&I) premium bonds

Premium bonds are the most well-known and popular lottery-style savings option, offering the chance to win cash prizes every month instead of paying interest. The more Bonds you have, the more likely you are to win, but you could win nothing at all. 

• How much could you win? Prizes start at £25 and go up to 2 x £1m monthly jackpots. The odds of each £1 bond number winning a prize is 21,000 to 1. You don't earn any interest on the balance.
• How do you enter? Each £1 you invest in premium bonds is given a unique number, though the minimum investment is £25. All the numbers are put into a monthly draw to win tax-free cash prizes. The maximum investment is £50,000. 
• Other terms? You must be over 16 to buy premium bonds directly, though anyone can buy bonds on behalf of children aged under 16, either online or by phone. If you live abroad, you can apply for premium bonds by post, and winnings can be paid into an international bank account. NS&I is backed by the Treasury, so 100% of your money is safe.

Find out more: premium bonds – are they worth buying?  

Credit Union Prize Saver Account

Any credit union member can open a PrizeSaver managed by the Association of British Credit Unions. If you’re not a member yet, you can sign up through your local credit union.

Credit unions are non-profit financial organisations owned and controlled by members. They are regulated by the Financial Conduct Authority, which means your savings are protected through the Financial Services Compensation Scheme.

• How much could you win? One top prize of £5,000 and smaller prizes of 10 x £50 and 10 x £20 (prizes are split between all participating credit unions). You don't earn any interest on the balance. 
• How do you enter? Every £1 held in a PrizeSaver account gets one entry into the monthly prize draw, capped at up to £200. Monthly prize draws take place between the 15th and 20th of each month. 
• Other terms? You must be over 18 to set up an account, and it must be held in your name only. The PrizeSaver draw is available to residents of England, Scotland and Wales (not Northern Ireland) through one of 17 participating credit unions. 

Find out more: credit unions explained 

Chip Prize Savings Account 

Digital bank Chip – which must be operated via an app on your phone – also offers a savings product that forgoes interest for entries into a regular prize draw.

Like premium bonds, your odds are boosted with the more entries you have, but you could win nothing at all. 

• How much could you win? Since July 2024, the prize pool is 1x £75,000, 1x £10,000 and 250 x £10. Prizes are awarded by the 7th of the month, and winners will be contacted via email (winnings do not count towards additional entries, unless you withdraw them and redeposit). You don't earn any interest on the balance. 
• How do you enter? Each month, you will be entered into a prize draw – provided you have an average balance of £100 or above and have not opted out. Every further £10 deposited gives you one additional entry – so, an average balance of £5,500 would get you 550 entries.
• Other terms? You need to be 18 or over to open an account, limited to one per customer. Any UK resident can open an account. 

Find out more: how to share your financial data safely with open banking