Coventry Building Society is offering its mortgage customers a regular savings account with a rate of 6%.
The Loyalty Mortgage Saver account is being offered to the society’s existing mortgage holders only.
Savers can deposit up to £1,000 into the account every month within its 12-month term.
Once the account matures, savers have the option to continue saving in an easy-access account, withdraw their funds, or use the money to overpay on their Coventry Building Society mortgage.
They can overpay above the existing 10% allowance and free of any early repayment charges (ERCs).
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Competitive rate
The 6% savings rate is a highly competitive deal in light of falling rates.
Savings rates have typically dropped following the cut in interest rates by the Bank of England during the summer.
The bank rate currently stands at 5%, having been cut in August for the first time in four years.
‘A first-of-its-kind account’
Oli Dyer, head of product propositions at Coventry Building Society, said: “We believe our new Loyalty Mortgage Saver is a first-of-its-kind account that offers great value for borrowers wanting to get into a regular savings habit and receive a high interest rate on their savings pots.
“As a member-owned organisation, we don’t have shareholders to pay, so we’re able to offer exclusive rates as a way of rewarding those who choose to stay with us.
“We’ve tried to be as flexible as we can to cater for those who want to build up their savings in different ways.
“Some may want to save every week, for others it may be once a month, and some might want to take a break from saving from time to time.”
The society has set the minimum balance at just £1 each month and there’s no limit on the number of times savers can put money in over the year, as long as it doesn’t exceed £1,000 in a month.
Dyer added: “After a year, borrowers have the freedom of spending their savings on whatever they wish, whether that be to continue to build their savings pots, spend on essentials or a new bigger purchase, or potentially overpay their mortgage without the worry of early repayment charges.”
The Loyalty Mortgage Saver can be opened online, in branch, over the phone, by post or via the app and offers a variable rate of interest of 6% for 12 months.
If the account is opened on the first of the month, the maximum amount that can be deposited is £12,000 and the total amount with interest earned would be £12,391.23 on maturity.
After 12 months, the account matures into Easy Access Saver (7) – a variable-rate account that allows unlimited withdrawals.
