Coventry Building Society launches poppy bond
Banks and building societies continue to cut rates on both fixed rate bonds and easy-access accounts. But some providers are coming out with top deals to replace them.
Coventry Building Society has launched a Centenary Poppy Bond paying 2.4% before tax (1.92% after) for savers willing to tie their money up until December 2017. The society will donate 0.15% of money invested in the Poppy Bond by 31 December this year to the Royal British Legion Poppy Appeal.
The rate is among the best available for those looking to tie their money up for around this period. Only Shawbrook Bank and State Bank of India UK pay a slightly higher 2.5% (2%).
Kent Reliance has raised the rate on its one-year fixed rate bond for new savers to 1.9% (1.52%), making it the best deal for fixed rates. Its two-year rate is also among the top deals at 2.2% (1.76%), along with State Bank of India UK at 2.25% (1.8%).
On easy-access accounts, BM Savings has cut the rate to new savers on its Online Extra to 1.35% (1.08%), down from 1.6% (1.28%). But Saga has a new account, Internet Saver, open to those aged 50 or over. At 1.55% (1.24%) it is a top-paying easy access account.
On tax-free cash Isas, BM Savings rate for new savers has been cut from 1.6% to 1.55% including a bonus for the first 12 months. National Savings & Investments pays 1.5% with no bonus, but you cannot transfer your existing cash Isas into this account.
The top deal for transfers but with no bonus comes from Sainsbury's Bank at 1.45% on £500 plus, or 1.49% on £30,000 or more with Barclays Instant Isa issue 1.
On fixed-rate cash Isas, best rates includes 1.7% with Post Office for one year, and 2.1% for two years or 2.25% for three years, both from Virgin Money. Coventry Building Society pays 2.6% fixed until 30 November 2018.
This article was written for our sister website Money Observer
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
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.