A market-leading charity account has been launched. But is it a good home for your savings?
Savers can now get a rate of 2.10% and give money to Cancer Research UK with the new account from the Coventry Building Society.
The rate is fixed for 22 months and the building society will donate a sum equal to 0.10% of all deposits to the cancer charity.
It’s an impressive account which should be popular, both for the attractive rate and the charitable aspect.
The deal
Savers will get 2.10% AER. The fixed-rate account can be opened with £1 and has an upper limit of £250,000.
It's called the ‘Race for Life bond’ but the money raised will be used across all areas of Cancer Research UK.
It works in a similar way to the building society’s Poppy Bond, which raises money for The Royal British Legion. This account was first launched in 2008 and has so far raised more than £8 million for the charity.
As it has been launched on a limited issue, this means that as soon as enough people have signed up the account will be closed. So if you’re keen it’s best to sign up early.
[SPOTLIGHT]The account can be opened online, in a branch or by post and interest is paid either monthly or annually.
How does it compare?
Rates are low across the board at the moment thanks to the Government’s Funding for Lending Scheme (FLS) which has given high street banks cheap access to loans and lessened their demand for savers' deposits.
Therefore the 2.10% from the Coventry is pretty competitive. Nationwide offers a similar deal with its two-year fixed-rate bond which pays the same amount of interest but you need to be a current account customer to apply.
However, if you have more money to put away, there are higher rates of interest on offer. The Islamic Bank of Britain has the market-leading account in the two-year space paying 2.32%. This account is based around Sharia'a law so the rate is stated as “expected income” although in practice this pays out in exactly the same way as interest.
Below you can see the top five accounts in the two-year fixed-rate range based on interest.
|
Account |
Length of bond |
APR |
Minimum deposit |
Access |
|
Islamic Bank of Britain: Sharia'a Compliant Fixed Term Deposit |
Two years |
2.32% |
£1,000 |
Online, branch, post, phone |
|
ICICI Bank UK: HiSave Fixed Rate Account |
Two years |
2.30% |
£1,000 |
Online, phone |
|
State Bank of India: Hi Return Fixed Deposit |
Two years |
2.25% |
£10,000 |
Branch, post |
|
Investec Bank plc: Two-Year Fixed-Term Deposit |
Two years |
2.23% |
£25,000 |
Online, post |
|
Bank of London and The Middle East: Sharia'a Compliant Premier Deposit Account |
Two years |
2.20% |
£25,000 |
Online |
Charity bonds
Most charity bonds do not offer market-leading interest rates and they’re typically opened by supporters of the specific charity, rather than savers looking for interest.
But the Poppy Bond, and now the Race for Life Bond, are exceptions to this rule as they not only offer a competitive rate of interest but also give a percentage of money to the chosen charities.