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Poppy savings bond paying 3.25% launches
Coventry Building Society has re-launched its popular Poppy Bond, a two-year fixed-rate savings bond now paying 3.25%.
As well as offering a good interest rate for this length of bond, it also helps to raise money for the Royal British Legion charity.
The Poppy Bond
Savers can get their hands on the new bond now and the rate of 3.25% is fixed until 31 December 2014.
On top of the interest, the Coventry will also make a donation of 0.05% of any funds invested towards the Poppy Appeal. Every year the savings account is launched in partnership with the charity and so far it raised nearly £7 million since it was launched in 2008.
The account can be opened with £1 and interest is paid monthly or annually but you can’t get your hands on the cash until the account matures.
Therefore it’s not suitable for anyone who needs ready access to their cash. If you think you might need your money, an instant access account or a one-year fixed rate account would be more suitable.
How does it compare to the rest of the market?
The savings market is pretty stagnant at the moment and so it’s hard to find a decent rate. Looking at two-year accounts, there’s only a few around which come close to this one from Coventry BS.
Coventry BS is promoting the Poppy account as 'market leading', but there are two places where you can earn more.
The State Bank of India's Hi Return Fixed Deposits pays 3.50% but this requires a deposit of at least £1,000 to open the account.
There’s also the Premier Deposit Account from the Bank of London and The Middle East which pays 3.40%, but this requires a hefty deposit of £25,000 to open the account. This is a Sharia-compliant account.
The reason these are sometimes not included in comparison charts is because, to comply with Sharia law, the accounts don't pay interest. Instead, they offer an 'anticipated profit rate'.
However they have a track record of paying 100% of the pre-determined rate.
Here's how the Poppy Bond compares:
Account | Rate | Minimum investment | Access |
State Bank of India Hi Return Fixed Deposits | 3.50% | £1,000 | Branch, post |
3.40%* | £25,000 | Online | |
Coventry BS Poppy Bond | 3.25% | £1 | Online, phone |
BM Savings Two Year Fixed Rate Bond | 3.15% | £1 | Postal |
Vanquis Bank High Yield Two Year Fixed Rate Bond | 3.11% | £1,000 | Online |
*Anticipated profit rate
You can earn a higher rate of interest by locking your money away for longer.
