Focus on: New market leading easy access account paying 3.25%
There's been little for savers to celebrate recently, but this week Coventry Building Society provided some cheer with the launch of its new Telephone Saver account.
The account pays a generous 3.25% annual interest a year, propelling it straight to the top of the easy access account best buy tables.
But is it the right account for you? We take a closer look...
What's the deal?
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Valid until: Thursday, May 23 2013
The Telephone Saver account pays 3.25% annual interest before tax on a minimum investment of £500.
Savers can decide whether to receive interest annually or monthly, which is useful for those looking to supplement their income. However, those who chose monthly interest will receive a slightly lower rate of interest of 3.20%.
Interest can be added to the account or paid in to another building society or bank account.
The maximum you can invest in the account is £250,000, but if you are planning on investing a large lump sum, bear in mind that only the first £85,000 will be protected by the Financial Services Compensation Scheme (FSCS).
Savers can make withdrawals whenever they want, although these must be for a minimum of £500 each time. However, you can only make deposits into the account up to and including October 31, 2012. And, again deposits must be for a minimum of £500 each time.
Although the account is called 'Telephone Saver' Coventry has confirmed that savers can both apply for and operate the account using the telephone or online, but not in branches.
Customers may only ever open one Telephone Saver either solely or jointly and must be aged at least 16 to apply.
Any catches?
As the headline rate includes a bonus which is only payable for the first year, savers will need to make a note of when the bonus disappears and move your money then if more competitive rates are available elsewhere.
While you can make as many withdrawals as you want, these can only be for a minimum of £500 each time, so if you regularly want to make small withdrawals, this may not be the account for you.
Verdict
With the Bank of England base rate showing no sign of increasing any time soon, an easy access account offering interest which is six and a half times higher than the current 0.50% base rate looks like a great deal.
The fact that you can make unlimited withdrawals also makes this account a winner, although some savers may be put off by the fact that you have to take out at least £500 each time.
Top tip
If you don't want to have to keep moving your savings around when bonuses disappear, you may be better off opting for an account whose interest rate doesn't include a bonus.
There are plenty of 'clean rate' accounts to choose from, such as Virgin's Easy Access E-Saver Issue 2 account, which pays 2.60% on a minimum investment of £1, and West Brom Building Society's WeBSave Plus 2 account, which pays 2.56% on a minimum investment of £1,000.
The Virgin account allows unlimited withdrawals without notice, whereas the West Brom account only permits one penalty-free withdrawal a year.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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