Coventry Building Society launches savings accounts with ‘competitive’ interest rates

Inflation: Victoria Scholar discusses rise in interest rates

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The building society confirmed introducing a new wave of fixed-rate ISA accounts to the market. One of these savings accounts includes a one-year fixed-rate ISA which pays a “competitive” 2.50 percent interest rate. This move by Coventry Building Society comes amid the cost of living crisis, which is being exacerbated by the staggering rise in inflation.

Currently, the UK’s inflation rate is at 10.1 percent and is forecast to reach as high as 18 percent next year, according to Citi.

To better support their customers, institutions such as Coventry Building Society are hiking their rates to help savings.

For the latest range of ISA accounts, all three fixed rate savings products can be opened with a minimum of £1 online, by phone, post or in branch.

Furthermore, a maximum £20,000 can be paid into accounts into the current 2022-23 tax year.

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Savers will be able to contact Coventry Building Society directly to enquire about opening one of these savings accounts.

Following this interest rate rise, the building society’s new set of ISA products will be the following:

  • One Year Fixed rate ISA – 2.50 percent interest tax-free fixed until September 30, 2023
  • Two Year Fixed Rate ISA – 2.75 percent interest tax-free fixed until September 30, 2024
  • Three Year Fixed Rate ISA – 2.90 percent interest tax-free fixed until September 30, 2025

Matthew Carter, the head of Savings at Coventry Building Society, outlined why they have opted to raise interest rates at this time for savers.

Mr Carter said: “We are committed to offering competitive interest rates to our customers and providing choices for people who are comfortable fixing their savings for up to three years with some of the market’s top rate paying ISA accounts.

“These fixed rate accounts are a popular option with savers looking for higher rates of interest as well as those who want a guaranteed rate for a set period.

“ISAs also have unique tax relief benefits for savers, earning interest that’s tax-free and doesn’t count towards Personal Savings Allowances.

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“And we’ve made it as straightforward as possible for people to open these accounts and to transfer any other ISAs they may have from previous years’ allowances, making a big difference to savers that have built up their savings pots over the years.”

This latest intervention from Coventry Building Society comes after the Bank of England’s decision to increase the UK’s base rate.

The financial institution’s Monetary Policy Committee (MPC) has hiked rates six consecutive times in an attempt to mitigate the damage caused by inflation.

However, financial experts are warning that there is “no guarantee” that banks and building societies will continue to pass on this rate increase to savers going forward.

Danielle Richardson, Which?’s money expert, explained: “This rise in the base rate will impact both homeowners and savers. Borrowers on fixed mortgages won’t see any change to their repayments, but anyone on a tracker or variable rate could see their payments increase.

“To protect yourself from paying more if the base rate rises again in the future, it could be a good idea to consider switching to a fixed deal with more competitive rates.

“Interest rates for savers have been going up recently, but there is no guarantee that your provider will pass on the latest increase.

“No savings accounts can match the current rate of inflation, but it still pays to shop around and make sure you’re getting the most competitive deal possible.”

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