The building society launched a similar account this time last year and it proved hugely successful and resulted in the Royal British Legion receiving a cheque for £1.6m.
We take a look at the details of the new Poppy Bond so you can work out whether it's a savings account you want to take advantage of.
What's the deal?
Coventry's Poppy Bond 2 is a fixed rate account paying 4.30% until 31 December 2011 - pretty impressive given the Bank of England base rate is just 0.5%.
If you've got money you can afford to lock away for two years, this is one of the best rates you can get - only the Islamic Bank of Britain and The AA beat it. Their two year deals are paying 4.50% and 4.35% respectively.
Many fixed rate bonds have high minimum entry requirements - in some instances thousands of pounds - but the Poppy Bond is available to those with just £500 or more to pay in so it will appeal to a large number of savers.
The maximum balance is £250,000 although remember that only £50,000 is totally guaranteed under the terms of the Financial Services Compensation Scheme (£100,000 for accounts in joint names).
Interest can be paid annually or monthly. If you opt to receive it on an annual basis it can be added to your account balance. If you prefer to receive interest monthly it has to be paid into a different account.
So what's the link with charity?
Coventry has launched the Poppy Bond in conjunction with the Royal British Legion. Once the issue of the bond is closed to new customers, Coventry will donate 0.20% of the value of the money that's been invested to the charity. Last year, the donation totalled an incredible £1.6million.
A number of financial products are linked to charities but often there is a trade off - either the rate isn't that great, or the charitable donation not that generous. The great thing about the Poppy Bond is that savers can take advantage of a great rate and the Royal British Legion also benefits hugely.
Any catches?
While the Coventry Poppy Bond is a really competitive deal, it won't be for everyone.
As with most fixed rate accounts withdrawals are not permitted during the fixed term. Early closure is also not allowed. It is therefore only worth considering if you have savings you won't need to access for the next couple of years.
Also, fixed rate accounts are aimed at those with a lump sum to invest. You can only pay an additional amount into the Poppy Bond while it is still open to new customers, or for seven days after your initial deposit is made - whichever is longer. Therefore, it's not the right type of account if you're looking to dip in and out of your savings, or save on a regular basis.
Verdict
This account is well worth considering if you have a lump sum you can afford to lock your money away. What's more, by opening a Poppy Bond you'll also be going your bit for charity.
Top Tip
Fixed rate bonds look particularly attractive in the current low interest rate environment because the rates on the best deals are significantly higher than the leading easy access rates. However, don't be led by rate alone.
Generally, the longer the fixed term, the higher the rate. But remember you probably won't be able to access your money during the fixed period. Also, while the rate may look competitive now, it could lose its edge over time, particularly if interest rates rise. To reduce the risk of being trapped in a deal that becomes uncompetitive, be wary of fixing for longer than a couple of years.
If you want to apply for the Coventry Poppy Bond 2, click here.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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