Why we need more savings providers like the Coventry
Coventry Building Society is rewarding existing customers by upping savings rates. It's a move other savings providers would do well to follow.
I feel like I’ve been a bit of a broken record over the last few months, moaning about savings accounts and the firms offering them.
Back in November I actually questioned whether there was any point in opening an easy access savings account, the rates had fallen so low. Incredibly, most easy access accounts today are even worse than they were back then.
But enough of the negativity. One savings provider has committed to genuinely helping its savers get a better rate on their cash and they deserve a little praise for it.
Coventry BS and its ISA savers
Coventry Building Society has announced that it is to increase the rates on its existing variable Cash ISAs from 1% or 1.2% to 2.5% from 6th April.
Around 250,000 savers will benefit from the change.
It’s a move that bucks two significant trends in the savings market. First, it’s a savings provider that is raising, rather than cutting, the rates it pays on a variable savings account. And second, it’s a provider that is rewarding the loyalty of its existing customers, rather than prioritising the recruitment of new customers.
Coventry is not alone
To be fair, Coventry BS is not the only firm to promise interest rate rises for existing customers. National Savings & Investments (NS&I) has also committed to moving holders of its T Cash ISA and Cash ISA (both of which have been closed to new customers for some time) onto its Direct ISA.
As a result those savers will move from an account paying 0.5% to one paying 2.25%, a very welcome jump.
This particular switch will take place in May this year, with around 94,000 savers benefitting.
And back in January Metro Bank launched a new one-year fixed rate Cash ISA just for existing customers who had come to the end of the previous fixed term. You can read more in Savings providers that treat their customers right.
Let’s not get carried away
The new rates on offer from Coventry and NS&I are very competitive in the current market, where the best rate on an instant access Cash ISA is just 2.5% from Cheshire BS.
However, when you consider that inflation currently stands at 2.7% on the Consumer Prices Index and 3% on the Retail Prices Index, you’re still losing money even on the market-leading instant access Cash ISAs!
It’s not exactly encouraging with the traditional ISA season at the end of the tax year just a matter of weeks away.
But for now I’ll take all the good news I can get when it comes to savings and keep my fingers crossed that more savings providers start to treat their customers as Coventry BS do.
Then we’d all be better off.