Less than 24 hours after Santander announced its new 1.5 per cent easy-access cash Isa, Coventry Building Society has upped the ante with its own version – and it’s open to everyone.
The building society’s new easy-access Isa 10 can be opened with £1, compared to £500 for Santander’s eIsa. It pays 1.5 per cent until July 2020, before reducing to a rate of 1.15 per cent.
That fall of 0.35 per cent would make Coventry’s offer drop from first to 18th in the independent This is Money cash Isa best buy tables.
Best buy: Now Coventry Building Society has unveiled a top cash Isa deal
The move from Britain’s second biggest mutual could build hopes among savers of an Isa season, after several years in which tax-free rates have been in a deep freeze.
This can be partly blamed on the Funding for Lending Scheme – launched in 2012 – pumping cheap cash into banks, and the personal savings allowance which came into force in April 2016.
The PSA means £1,000 of interest is tax-free on savings each year for basic-rate taxpayers and a slimmer £500 for higher-rate taxpayers, removing one of the unique selling points of the Isa.
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Looking for a better savings rate? Check our independent best-buy tables
Santander’s best buy launch was noteworthy because the high street giant was one of the big banks that would battle for tax-free savers in previous years.
However, the top-rate of 1.5 per cent for its eIsa is open only to the bank’s 123 World and Select customers.
Coventry’s new deal is the first time in 2019 a cash Isa open to general savers and new customers has reached parity with the best option in our easy-access tables – Cynergy’s offer paying 1.5 per cent for 12 months.
Among the other top easy-access cash Isas are Oaknorth Bank’s offer, paying 1.44 per cent, Shawbrook Bank, paying 1.43 per cent and Sainsbury’s Bank, paying 1.41 per cent.
Those three all come without bonus rates.
Coventry also comes in the top three with its offers on two-year, three-year and five-year cash Isas – with its five-year offer paying the top rate in our tables of 2.3 per cent.
You can pay up to £20,000 tax-free into a cash Isa until April 5 this year, with the Isa allowance for 2019/20 staying the same.
Data from website Savings Champion shows that last year, the best buy easy-access Isas were up more than 30 per cent since the start of 2018.
Anna Bowes, the site’s co-founder, told This is Money yesterday that she hoped to see ‘more competition in the weeks to come’ as a result of Santander’s initial push to the top of the easy access tables.
It’s only been 24 hours, but it’s already been supplanted.