New prize saving account launched offering £500 – how does it compare?
SAVVY savers could be in with a chance of winning up to £500 each month with a new savings account which is available from today.
Coventry Building Society has launched the “Sunny Day Saver”, a regular savings account with an interest rate of 6.25%.
A regular savings account lets you put aside money up to a set amount each month for a certain period, which is usually a year.
All savers who pay in at least £10 a month into this account will also be entered into a prize draw to win one of 20 cash prizes worth up to £500 each month.
There are 220 prizes up for grabs in total and all winnings will be paid directly into the customer’s savings account.
Each month there is one £500 prize, five worth £200 and 14 £50 winnings.
Savers can squirrel away up to £150 a month into this account for a year but there is no obligation to pay in every time.
If you were able to save the maximum amount each month you would earn £62.14 in interest after one year.
But those who want to get the account need to act fast as it can only be opened in September with as little as £1.
Andrew Hagger, personal finance expert and founder of Money Comms, said: “6.25% is an excellent rate and this account from Coventry Building Society is a great option if you’re looking to start the savings habit.
“The chances of winning are unknown as it will depend on how many people open the account, but in effect it’s a free draw for Sunny Day savings customers.”
How does it compare to other prize accounts?
Premium Bonds
Premium Bonds have long been popular with savers since they were first launched in April 1956.
More than 24 million people currently hold the bonds, which do not offer interest but instead enter you into a monthly prize draw where up to £1 million is up for grabs.
Bond-holders should win on an ad-hoc basis each year, giving them a prize rate equivalent to around 4.4% interest on their nest egg.
However, there is no guarantee that you will win.
You can pay in anything between £25 and £50,000 into the account but the more bonds you have the greater your chance of winning.
Any Premium Bond numbers that go over the £50,000 limit are not eligible to win prizes.
How to check if you've won
IF you think you might have an unclaimed prize, the best way to check depends on what info you have about your Premium Bond account.
You’ll have been given both a Premium Bond holder’s number and a National Savings and Investments number.
- If you know your Premium Bond holder’s number, you can go to the NS&I website or download its prize checker app. Enter your holder’s number and it’ll tell you if you’ve any unclaimed prizes.
- If you don’t know your holder’s number, but have your NS&I number, you can use that number – which you’ll find on any letters from NS&I – as well as your surname and password to log in to NS&I online and find your holder’s number on the “account details” page. NS&I’s prize checker app also accepts your NS&I number.
- If you don’t know your holder’s number or account number, you can phone NS&I on 08085 007 007 or write to it and ask for a replacement bond record to be sent to you. You should give as much detail as you can, for example your full name, address details, when and where you bought your Premium Bonds and how much they’re worth.
- Alternatively, you can use NS&I’s tracing service or the My Lost Account website, both of which can track down your Premium Bond details. They ask you to fill out info about yourself including your name, address, an estimate of how many Premium Bonds you hold and how long you’ve held them.
- If you find you do have an unclaimed prize, you’ll need to write to NS&I at: NS&I, Glasgow, G58 1SB. Give as much information as you can, including your name and any information about your Premium Bonds.
- Prizes will then be sent to your home address as a warrant, which is like a cheque. Unfortunately, you can’t have unclaimed prizes paid directly into your bank account.
- The process is slightly different if the Bond holder has died – you’d first need to inform NS&I of the death and then follow the steps above. Any prize money will be paid to whoever inherits the Bond holder’s estate.
The current odds stand at 21,000 to one but the prize rate can go up or down at any time.
Prizes also vary but there’s usually more than one million £25 prize winners.
Anna Bowes, from the comparison website Savings Champion, said the Coventry Building Society account is a better fit for savers who want to earn guaranteed interest each month.
“You may win nothing on the Premium Bonds, especially if you are adding just a small amount each month,” she said.
“Of course you could be lucky but it would take three £25 prizes over the year to beat the interest you could earn on a deposit of £150 a month into the Coventry account.”
Halifax
Each month £550,000 worth of prizes are handed out to Halifax and Royal Bank of Scotland customers who have at least £5,000 in savings with either bank.
All Halifax savings accounts and cash Isa qualify, except children’s accounts.
There are three prizes of £100,000, 100 prizes of £1,000 and 1,500 prizes of £100 up for grabs each month.
Halifax has not said how many people enter the draws, which means it is impossible to calculate the odds of winning.
To be in with a chance of winning you also need to be registered for the draw through the Halifax app, online banking, mobile banking or by visiting your local branch.
The bank’s most competitive savings account is the Regular Saver at 5.5%, which lets you pay in £25 to £250 a month.
If you paid in £150 a month for a year you would earn £54.54 in interest, £7.60 less than with the Coventry Building Society account.
Andrew Hagger said: “Halifax has bigger and more prizes but you need a minimum £5,000 balance to qualify, which is not ideal for a newbie saver.
“Halifax savings rates are pretty average and nowhere near 6.25% from Coventry even if you opt for a fixed rate bond.”
Kent Reliance
Specialist bank Kent Reliance has a monthly £1,000 prize draw for customers who have a savings account with £100 or more or a mortgage account of £1,000 or more.
All eligible customers are automatically entered into the draw.
There is only one entry per person, which means that saving more money will not increase your chance of winning.
The bank’s best savings rate is with its Regular Savings Account Issue 12, which pays 5.10% on deposits of up to £500 a month.
Paying in £150 a month for a year would leave you with £50.52 after 12 months, £11.62 less than if you had opened the Sunny Day Saver.
You need just £25 to open the account but must do so in a Kent Reliance branch.
Chip
Digital bank Chip hosts a monthly prize draw where savers could pocket up to £75,000.
There is one £75,000 prize, one £10,000 win and 250 prizes of £10.
Every £10 of your average balance gets you one entry into the draw.
The account does not have an interest rate and instead the balance counts towards entries in a monthly prize draw.
The number of entries you have is decided by your average balance over the next month.
This means the earlier you pay money into the account, the more entries you have.
For example, if you pay in £1,000 on the first day of the month and hold it in the account for a month then your average balance would be £1,000 and you would have 100 entries.
But if you paid in £1,000 on the 20th day of a 30 day month then you average balance would be calculated from 20 days of £0 balance and ten days of £1,000.
How you can find the best savings rates
If you are trying to find the best savings rate there are websites you can use that can show you the best rates available.
Doing some research on websites such as MoneyFacts and price comparison sites including Compare the Market and Go Compare will quickly show you what’s out there.
These websites let you tailor your searches to an account type that suits you.
There are three types of savings accounts fixed, easy access, and regular saver.
A fixed-rate savings account offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw but it comes with a hefty fee.
An easy-access account does what it says on the tin and usually allow unlimited cash withdrawals.
These accounts do tend to come with lower returns but are a good option if you want the freedom to move your money without being charged a penalty fee.
Lastly is a regular saver account, these accounts generate decent returns but only on the basis that you pay a set amount in each month.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.