Coventry Building Society launches ISA with ‘market-leading’ rate

Martin Lewis advises on savings accounts and premium bonds

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The financial institution’s New Limited Access ISA (Online) is now available to new and existing customers. This particular savings account from the building society offers people an interest rate of 1.85 percent. Britons are currently dealing with the UK’s cost of living crisis with Coventry Building Society’s latest intervention being the latest attempt to encourage more saving.

The savings account can be opened online for as little as £1 and savers can pay in current ISA savings or ones from previous years.

This offering from Coventry Building Society allows customers six charge-free withdrawals annually.

Alternatively, savers are allowed to make up to six ISA transfers to another ISA account every year.

Savings accounts can be managed online by visiting Coventry Building Society’s website.

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Recently, the financial institution has made a conscious effort to assist customers during the cost of living crisis.

At the beginning of this month, the building society raised interest rates on 92 percent of its variable savings accounts.

Matthew Carter, the head of Savings and Mortgages at Coventry Building Society, explained: “Our decision to increase rates on the vast majority of variable savings balances and boost cash ISAs to align rates with non-ISA accounts reflects our commitment to delivering long term value to our members.

“We have continued to pass on as much as we can afford while protecting SVR borrowers from any increases.”

One of the major factors diminishing returns on savings in the UK is the country’s soaring inflation rate.

While inflation dipped slightly for the 12 months to August 2022 this week, it still remains at a relatively high 9.9 percent.

To mitigate the damage resulting from this, the Bank of England has raised interest rates to help banks and building societies assist their customers.

Sarah Coles, a senior personal finance analyst, Hargreaves Lansdown, outlined how inflation is hurting savings accounts.

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Ms Coles said: “Even those who are managing to avoid dipping into savings are watching the spending power of their money disappear as savings rates fall behind inflation: 17 percent said their savings were losing value.

“It’s just not possible to keep pace with inflation in any savings account at the moment, but that doesn’t mean you should resign yourself to a miserable high street account paying a fraction of one percent.

“There are competitive easy access deals paying over two percent, and if you can afford to tie some of the cash up for a few months or even a year, you could make up to 3.4 percent.”

In light of the rise in the cost of living, the finance expert warned that many savers are “running out of road” as interest rates fail to keep up with inflation.

She added: “For those who either were unable to save, or who have spent all their emergency savings, things are even worse.

“Almost half of people are finding it difficult to pay their energy bills, and one in eight are currently building debts just to make ends meet.

“This feels like a solution in the short term, but over time it just adds to your problems.

“Eventually you run out of road, and then you face the prospect of paying interest and making repayments on top of everything else.”

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