Best savings rates: Coventry launches fourth best buy deal in a

Building societies have continued to roll the dice at the top of the best buy savings tables, after Newcastle upstaged Coventry by launching a 1.05 per cent paying account with a bonus rate and withdrawal restrictions.

The new best buy rate limits savers to three withdrawals a year and comes with a 0.8 per cent bonus which lasts until November 2021, meaning the rate paid on savings falls by nearly four-fifths after a year.

The Triple Access Saver, which can be opened in-branch or online with £1,000, promises not to pay lower than the Bank of England base rate, which currently sits at an all-time low of just 0.1 per cent.

Tumbling dice: Coventry has relaunched the same account four times in a fortnight

Tumbling dice: Coventry has relaunched the same account four times in a fortnight

Tumbling dice: Coventry has relaunched the same account four times in a fortnight

Newcastle’s move comes on the same day that Britain’s second-largest mutual Coventry relaunched its easy-access account for the fourth time in a fortnight.  

Its latest Double Access saver will pay 0.96 per cent interest on £1, compared to 1.2 per cent when the cuts started coming.

Coventry has made five rate changes and launched the same account four times in the last two-and-a-half weeks, as the savings best buy tables continue to react to the earthquake caused by National Savings & Investments’ impending cuts

It remains the best easy-access rate in This is Money’s savings tables, paying a fraction more than Yorkshire Building Society.

But the rate is 0.09 percentage points lower than the account it replaces and it pays 0.29 fewer percentage points in interest than the best buy rate it planned to launch on 21 September.

Savers can choose to be paid interest annually or monthly and can make two withdrawals a year without penalty. 

The mutual revised the rate down to 1.2 per cent when the account actually launched, but the news it was set to overtake Skipton Building Society, which itself had launched a best buy easy-access account with a bonus rate which was around for just two days, was dwarfed by cuts from NS&I.

The Treasury-backed bank said it would cut the rate on its market-leading Income Bonds from 1.15 per cent to just 0.01 per cent and the rate on its easy-access Direct Saver from 1 per cent to 0.15 per cent, in devastating news for savers.

A disappearing act: Easy-access rates are starting to shrink a fortnight on from NS&I's announced rate reductions, which will see some previously market-leading accounts to pay close to nothing from November

A disappearing act: Easy-access rates are starting to shrink a fortnight on from NS&I's announced rate reductions, which will see some previously market-leading accounts to pay close to nothing from November

A disappearing act: Easy-access rates are starting to shrink a fortnight on from NS&I’s announced rate reductions, which will see some previously market-leading accounts to pay close to nothing from November

NS&I had been almost the sole safe haven since it reversed proposed cuts to its easy-access offerings in mid-April to support savers during the pandemic.

Figures from the Bank of England found more than £33billion was stashed away by savers between April and August. This means it has almost blown through its £35billion fundraising target for the entire year in just five months, meaning it has announced even harsher cuts than it initially proposed earlier this year in February.

Since then there has been a dash for savers’ cash by building societies and smaller banks, but easy-access rates and short-term fixed-rate deals, which had been recovering towards the end of the summer, have disappeared quickly as savings providers fill up with money.

A further 10 bonds lasting up to 18 months were cut or removed from sale on Monday, according to changes to This is Money’s best buy tables, as providers which no longer have to set their rates higher than NS&I to attract deposits slash their offers.

Coventry’s first Double Access saver lasted just three days before the account was relaunched with a rate of 1.1 per cent on 24 September, with the rate cut again to 1.05 per cent at the start of this month.

It has now been cut again, with even the country’s second-largest building society unable to deal with the unprecedented demand from savers.

Its senior savings product manager Daniel McDonald said its offering continued to be ‘extremely popular’ and that it was ‘a fast-moving market for savers right now’, highlighting how quickly savers need to move if they want to take advantage of the best deals.


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THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS

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