Easy-access savings hits 4%: Coventry BS launches new account

All savers can now get 4 per cent interest on an easy-access account after Coventry Building Society launched its new Four Access Saver which, crucially, is open to new customers as well as existing ones.

The account can be opened online with any amount from £1 up to £250,000

Savers can choose to be paid interest annually or monthly. This can either be added to the savings account or paid into a bank account.

Saver deposits are protected up to £85,000 per individual under the Financial Services Compensation Scheme, or in the case of joint accounts, this is doubled to £170,000.

4%: Coventry Building Society has launched a new online Four Access Saver account at a joint-market-leading rate available to new and existing members.

As the name suggests, there is a slight snag. The account offers a maximum of four withdrawals every 12 months starting from the day the account is opened.

Any additional withdrawals will be subject to a charge equal to 50 days’ interest. 

This means savers who sign up would be wise to treat this account as their rainy day or emergency fund, rather than everyday savings they can dip in and out of each month.

Matthew Carter, head of savings at Coventry, said: ‘Our new account is ideal for those that only take money out of their savings pots a few times a year but want the peace of mind that a limited access account provides. 

‘Whether saving small amounts or larger lump sums, the account is also ideal for those searching for a highly competitive rate for their savings.’

How does it compare?

Although Coventry’s deal is technically on par with West Brom Building Society’s 4 per cent Double Access account it is far more accessible given that savers can only apply for the former either in a branch or via the post. 

It’s also worth pointing out that with West Brom, if you make more than two withdrawals, the rate drops to 2.2 per cent. 

HSBC also offers its banking customers access to its 4 per cent Online Bonus Saver on balances up to £10,000 — so a maximum of £400 interest a year. 

But they only earn this rate if they don’t withdraw any money from their account for 12 months.

Those looking for an easy-account offering unlimited access would be better off opting for either Gatehouse Bank or Shawbrook Bank.

Gatehouse Bank is paying 3.9 per cent while Shawbrook Bank is paying 3.91 per cent. 

New best buy cash Isas  

Savers needing to protect the interest they earn from the taxman have a number of new best buys to choose from.

Shawbrook Bank has upped its easy-access cash Isa to a market leading 3.78 per cent, overtaking Gatehouse Bank’s 3.75 per cent.

It also launched a one-year fixed cash Isa paying 4.63 per cent, overtaking Charter Savings Bank 4.6 per cent deal.

– Check out the best cash Isa rates here. 

This is all the more important given that millions of savers are facing tax bills on their interest for the first time in seven years – and many could be forced to pay hundreds of pounds.

The Personal Savings Allowance, which was introduced in April 2016, affords Basic-rate taxpayers a £1,000 PSA. This means they can receive up to £1,000 a year in savings interest tax-free.

Higher-rate taxpayers have a £500 PSA each year. Additional-rate taxpayers do not receive a PSA.

An estimated 3.8million more savers are likely to be dragged into this higher rate taxpayer bracket during this financial year, according to analysis by Coventry Building Society.

Adam Thrower, head of savings at Shawbrook, said: ‘Savers haven’t seen these kinds of rates and activity in the market for well over ten years. 

‘It’s a great opportunity for people to check what they’re currently receiving and switch to a better paying provider, or open a new account to mitigate some of the impact inflation may be having on their cash sitting in current accounts. 

‘Isa’s are particularly attractive for people with larger savings pots as they can benefit from tax-free interest payments on annual deposits up to £20,000.’