Coventry BS launches new issue of 3.05% saver
Coventry Building Society has launched another issue of its popular eNotice online savings account.
After a year, the rate drops to 2.55% but the 0.5% bonus is much less than some of the other best buy accounts, such as 1.5% from Northern Rock and 1% from Principality's notice account.
There is also no limit on withdrawals from the eNotice account but customers will need to give 30 days' notice to access their money without incurring a penalty, compared to 120 days for Northern Rock's offering.
The competitive terms of the online saver mean despite being a notice account, eNotice stacks up well against easy access best-buy Nationwide MySave Online Plus, says Andrew Hagger, spokesperson for Moneynet.
"Out of the two, I prefer the Coventry eNotice account – not only because of the lower bonus element, but also because the withdrawal penalties are less harsh," he says.
"With Coventry, if you don't give 30 days' notice, you lose 30 days' interest on the amount withdrawn – whereas with the Nationwide account after the one free withdrawal, your rate drops to 0.1% and you don't get the bonus on the whole balance in any month you make a further withdrawal."
Although as a rule notice accounts are less flexible than easy access accounts, Hagger believes that the 30-day notice period allows for minimal disruption: "If you have an emergency you need to pay for, you can use the credit card and at the same time give notice on the savings account so you can repay the credit card bill when it comes in without losing any interest."
A savings account on which the account holder is required to give a period of notice before making a withdrawal or face a penalty, usually a loss of a specific number of days’ interest or pay a fee. Notice periods of 30, 60 or 90 days are common. These accounts usually pay higher than average interest rates and require large initial deposits (£1,000 minimum) so the notice period and penalties are there to discourage withdrawals. Some of these accounts will only allow a certain number of withdrawals a year.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.