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Coventry Building Society

Type: Postal savings for over 60s

Description: Coventry Building Society has launched a postal savings account for those over the age of 60 which pays a rate of gross 6.6 per cent annual equivalent rate a year or a net equivalent rate of 5.28 per cent a year, and includes a 0.85 per cent annual equivalent rate bonus for the first year. It guarantees that annual equivalent rates will be at least 0.25 per cent above the Bank of England’s base rate up to 31 March 2010.

Conditions: 12 penalty-free withdrawals each year from the date of opening. All withdrawals must be at a minimum of £500. Minimum investment is £500 and the maximum is £250,000

Verdict: The interest rate is very attractive for the first year and the flexibility of 12 withdrawals a year seems unbeatable. There is no lock-in term as required by similar savings products and savers have assurance that the interest rate will not fall below the Bank of England base rate. However as security of deposit takes precedence over returns under these exceptional times, investors may not wish to deposit more than £50,000 in this account.

Rating: four stars out of five