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Coventry BS increases rates on Junior Isa

Coventry BS increases rates on Junior Isa

Coventry Building Society has increased the rate on its Junior Cash Isa product to 2.35 per cent, saying it was "the best rate we can afford".

The new rate was effective from March 1 2022, when it was raised from the previous rate of 2.25 per cent.

However, the Isa still pays well below the rate seen in 2020, when it was reduced from 3.60 per cent to 2.95 per cent following the Bank of England's base rate cut to 0.10 per cent. The central bank has since taken a more hawkish approach and raised the rate back to 0.75 per cent over the past three months.

Coventry Building Society has two Junior Isa products, one launched in April 2012 and closed in March 2021, and one launched in February 2021, which is still open.

Both offered a rate of 2.25 per cent until March this year when it was upped slightly to 2.35 per cent.

However, in May 2020 Jisa offered as much as 2.95 per cent and in 2018 it was 3.60 per cent, prompting one customer's disappointment at the latest "marginal" increase.

"When I took out the Isa it was offering 3.6 per cent and seemed like a good starting point to build up a decent enough pot to invest when it hit four figures," she said. Adding: "We'll be moving it into a stocks and shares Isa soon."

Matthew Carter, head of savings at Coventry Building Society, said: “We continually offer market leading or highly competitive Junior Isa accounts encouraging good savings habits over the long term.

"As with all of our savings rates we pay the best rate we can afford, not what we can get away with.

"Savings can start from as little as £1, with no charges and no risk to the money that’s put in, so it’s a great way to build a nest egg for children to have when they turn 18.”

Coventry BS Jisa 1 rates 2018-2022

March 1 20222.35%
November 5 20212.25%
May 6 20202.95%
September 1 20183.60%

Research from Boring Money out last year found a mere 3 per cent of all accounts held for children were in stocks and shares Jisas despite the potential for significantly higher growth.

The vast majority of financial products held for children were cash products, including cash Jisas and premium bonds.

Around a third of those saving in cash for children told Boring Money they preferred the stability it offered, while easy access to the money and fear of making a loss were also factors that people said put them off investing.

But cash threatens to be eroded by inflation, which is expected to reach 7 per cent or more next month, and could rise even higher following Russia's attack on Ukraine, which has seen the major oil producer cut off economically by the west, translating into higher food and oil prices.

Boring Money also found mothers were significantly more likely to be contributing to savings and investment products on behalf of their children, at 60 per cent compared with 40 per cent of fathers.