Martin Lewis offers advice on savings and interest rates
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Interest rates have been drastically affected by the Bank of England’s decision to lower its base rate over a year ago. As such, it has been a challenging time for Britons who are hoping to grow their money. There are, however, still some options which present themselves to savers at the moment, and people may wish to pursue these.
Some of the current top interest rates will be exclusively available to individuals who already have a current account with the provider.
This includes, for example NatWest and its sister bank RBS, who are offering a three percent interest rate account on balances up to £1,000.
However, leading the pack on regular savers which are open to all is Coventry Building Society.
The building society is currently offering an account with an interest rate paying 1.05 percent.
The provider explains: “The little you put away each month can become more than just money.
“Whatever – or whoever – you’re saving for, Regular Saver offers a competitive rate and lets you pay in up to £500 a month.”
It is worth bearing in mind the interest rate on this account, though, is variable.
This means Coventry Building Society could change it – up or down – at any time, and so savers should keep an eye on this.
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The account last for a 12 month period to help Britons grow their money during this time.
Interest will be calculated daily and paid annually on the anniversary of the date a saver first opened their account.
Access to funds will also be vital for many savers to understand and Coventry Building Society has broken down its rules.
After the 14 day ‘cooling off period’ available with the account, Britons will be able to take out money and close the account if they should so need.
But on any amount which is withdrawn, there will be a charge equal to 30 calendar days of interest on the sum withdrawn.
Notice for withdrawal or closure cannot be given on this account.
As a result, this is probably an option for those who are willing to part with their money for the full 12 month term and access it with interest in due course.
However, while the account is offering an attractive interest rate compared to others, it will be important to look at the eligibility criteria.
Coventry Building Society states a person must be aged 16 or over to open this kind of account.
Each month, a person can pay in what they like, up to a maximum of £500.
If a payment takes a person over the £500 monthly limit, then the whole payment will be returned to them.
The account can be opened and managed online, via phone or by post.
With interest rates so low, it may seem pointless to save money in a bank or building society, however, people should think carefully before taking this kind of action.
This is because many providers offer protection through the Financial Services Compensation Scheme (FSCS).
This means funds up to £85,000 are protected should the worst happen.
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