Coventry Building Society launches table-topping telephone saver
The rate on the Telephone Saver includes a one-year bonus of 1.25% before the rate reverts to 2%.
Savers can open the account with a minimum balance of £500, rising to a maximum of £250,000.
The account is instant access but is geared more towards lump sum rather than regular saving. For example, it does not permit deposits or withdrawals of less than £500 and it will cease to take any deposits from the 31 October this year.
Savers can opt for interest to be paid monthly or annually.
The Telephone Saver uses a UK-based customer service team, but also offers 24-hour access to support online and via a telephone self-serve facility.
This account pays a fantastic rate on your money and while it does include a bonus, it isn't as big as many others on the market, meaning if you don't switch to a better deal after 12 months you'll still get a reasonable rate on your money (currently 2% AER).
However, like many of the top paying accounts it has strings attached. In this case it isn't very flexible - withdrawals and deposits are limited to £500 chunks and from November savers won't be able to pay in any more money.
This means it's not a great rainy-day account and is better suited to savers with a lump sum who don't want to touch their cash, but don't want to lose access to it altogether.
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.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.