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Coventry Building Society

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Building Society

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      30.09.2012 18:45
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      Great rates, great service and fully FSCS protected - what's not to like!

      The Coventry Building Society's motto is "TLC not PLC", which, for me, pretty much sums up its attitude. Like a true building society, it is owned by its members (it's a mutual society) and so has no share-holders. While this might seem quite a minor difference, it means that there are no big investors baying for huge profits at the expense of the customer, as could happen with the high street banks like Lloyds, HSBC etc. It also means that they are governed by slightly different legislation to the banks. They are not allowed to take part in some of the more risky types of investment instruments, such as some derivatives trading, and they are only allowed to speculate if it is to minimize their risk, Whereas the big banks, as we all know, can speculate on a huge variety of instruments and often derive their profits from this speculation.

      The advantage of this for the members (all borrowers and savers are members of the society subject to meeting certain minimum criteria) is that there are not likely to be any nasty surprises in the form a huge trading loss, and that any profits can be kept within the building society rather than being paid out to external investors.

      The Coventry is the third biggest building society in UK (after the Nationwide and Yorkshire Building Societies) with assets of £28,848 million (as of Dec 2011; source - Building Societies Association) and has its Head Office in Coventry (no surprise there!). It is protected by the FSCS, meaning that all savings up to £85,000 per person are fully guaranteed by the government in the very unlikely event that the Coventry were to go bust.

      I have been a customer of the Coventry Building Society for about 7 years. I first joined because I was looking for a second current account (their Coventry First account) and it offered a good rate of interest. Since then, I have opened and closed several savings accounts with the Coventry and currently have 4 accounts with them.

      I have opened accounts online, over the phone and via the post. I tend to use their online banking system for most of my day to day banking, but also use the phone and post to manage my accounts. Put simply, I have found them to be one of the easiest financial institutions to deal with (and I have dealt with virtually all of the UK banks and building societies, both professionally and personally). Their staff are always helpful and knowledgeable about their products and their systems and procedures.

      Even my mother (who is over 70 and can be difficult!) opened an ISA with them and said how 'lovely and helpful' they were.

      It's all very well that they have great people, but are their products any good?

      In my opinion, yes. The Coventry often has table topping rates, especially on some of its saving products. For example, they currently (September 2012) offer a junior ISA paying 3.25%, a 60 day notice ISA paying 3.25% and a Family Saver paying 3% (provided that you arrange to have your child benefit paid into the account). Additionally, they frequently offer great instant access saving rates guaranteed for 1 year; the recent closed Telephone Saver was paying 3.25% for instant access - the best rate I have seen for ages.

      It is worth noting that a number of Coventry's best saving rates are guaranteed for one year, but the rate drops after that time. Personally, I just write a note in my diary and move my savings to a new account once the year is up. Usually, the Coventry has a new offering at a good rate so I don't even have to move the money to another bank or building society.

      Their current account - Coventry First - offers 1.1% on all balances (up to £250,000). For the first year provided you pay £1000 per month in to the account. The account comes with a debit card but no cheque book. This rate can be beaten by the likes of Lloyds Vantage or Santander 123 but both of these accounts have restrictions and/or fees which might make them less suitable for some. The Coventry First is a no-frills account - no free travel insurance, cashback or other freebies - but, like Ronseal, it does what it says on the tin, efficiently and politely.

      As well as savings and current accounts, the Coventry also offers mortgages, travel money, travel insurance, home and contents insurance and 'family protection' insurance products. I cannot comment first hand on these products as I have yet to use them, but I would definitely consider getting a quote, if I were looking for a mortgage or insurance.

      In short, great rates, great service and fully FSCS protected - what's not to like!

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