New market-leading easy access account

If you want access to your cash but a decent rate of interest too, this new account from Coventry Building Society may be for you.

My easy access account has been a reassuring presence over the last six months or so. Before my wife went on maternity leave last December, we spent a few months saving like crazy to ensure we had a decent pile of cash stockpiled. While I had no real idea of just how expensive having a baby would be, I knew it would be a good idea to have money there in the background, “just in case”.

And now that the Statutory Maternity Pay has come to an end, that money is coming in very handy in helping with grocery costs, energy bills and the mortgage.

Thankfully my wife will be back earning again soon (so we can start adding to the account rather than just withdrawing!), but I’ve learned to love having an easy access account there in the background, ready to turn to when things start to get a little tough. So if you’re in a similar position, knowing that at any stage you may need to call on your money, where should you put it? After all, you still want it to be earning interest while you aren’t touching it.

Coventry Building Society has launched a brand new account for savers like me, who want easy access to their cash, and what’s more the account is pretty good. In fact, it’s a market leader!

The Coventry Poppy Online Saver

Savers can enjoy a rate of 3.15% on their cash with the Poppy Online Saver, which includes a first year bonus of 1.15%.

You can enjoy four penalty-free withdrawals from the account each year, while the money you save also helps the British Legion’s Poppy Appeal. For every £20,000 that is invested by savers, the building society has pledged to donate £10 to the Poppy Appeal. That might not sound like much, but since the Coventry started offering Poppy-branded products back in 2008, it has donated £5m, so it really does add up. That means your cash not only enjoys a market-leading rate, but helps to make a difference too.

Let’s see how it compares to the best easy access savings accounts around at the moment:

As you can see, the Poppy Online Saver offers the best rate in the market, so should be your first choice if you’re looking at getting the best possible return on your money. However, the account is not likely to be around for long, so if you’re planning on applying, I’d suggest you hurry before it disappears!

The downsides

While the table above makes clear that the Poppy Online Saver is indeed the best easy access account around, in terms of offering a great return, it does also highlight the problems with the account - namely, the fact that it only allows four withdrawals a year.

This is a particular bugbear of mine, when 'easy access' savings accounts limit free withdrawals. The name ‘easy access’ suggests an account where getting hold of your money will not be problematic. The idea of limiting how often you can get hold of your money completely contradicts this.

Thankfully, the Coventry account is not quite as restrictive as the Nationwide MySave Plus account, but it’s a sad fact that you have to sacrifice completely free access to your savings in order to get the best rate.

Another downside to the Coventry account is that it offers a bonus of 1.15% during the first year. Obviously, this is a good thing during those initial 12 months, but it does mean that in a year’s time your rate will drop fairly drastically. As a result you’ll need to shop around again for a new home for your cash in order to get a good return. Again, the Coventry account is certainly not the worst offender in this regard (the Halifax Online Saver Account takes that accolade, with an absurd 2.70% bonus taking the total rate to 2.80%) but it’s still worth taking note of.

Locking your money up

As we have seen, limiting the access you get to your cash means you get a better rate. So if you know you can cope without your cash for a year or two, the rate you can secure on your savings jumps significantly.

Check out the top paying bonds over one year, 18 months and two years:

Again, Coventry offers my favourite deal. Locking your cash up for 17 months strikes me as a nice amount of time at the moment, as the base rate looks certain to have risen at least once by then. As a result, chances are the rates on offer on bonds – and easy access accounts for that matter – will be even better.

What’s more, you can open the bond even if you don’t have a large stack of savings already in place.

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