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Coventry BS unveils market-leading cash ISA – but you may need to act fast

Joanna Faith
Written By:
Joanna Faith

The end of another ISA season has seen many providers cut or pull top deals, but some are bucking the trend and raising rates to entice savers.

Coventry Building Society today bumped the rate on its easy access ISA to 1.47%, taking it to the top of the best buy tables.

The move leaves previous table-topper, Kent Reliance, in second place, with a slightly lower rate of 1.46%.

While Coventry is now the top-payer, its rate includes a bonus of 0.32% for 16 months, so it will drop to 1.15% on 31 August 2020.

New and existing customers can open an account online with a minimum deposit of £1.

However, savers may want to act fast to take advantage of this deal as providers have been cutting their ranges since the start of the new tax year.

Analysis by Moneyfacts shows some of the top deals around at the end of the last tax year have been cut or withdrawn altogether, particularly in the short-term fixed ISA space.

For example, Oaknorth and Coventry have both pulled their competitive one-year fixed ISAs since 6 April, which were paying 1.74% and 1.70% respectively.

Natwest, RBS, Sainsbury’s Bank, Santander and Shawbrook Bank have also cut rates.

Rachel Springall, finance expert at Moneyfacts, said: “As many of the rate cuts come from challenger banks, it may be the case that they are adjusting their market position to deal with the onslaught of funds from savers.

“During a period of economic uncertainty, savers may well turn to short-term fixed ISAs instead of longer-term deals, so this increased demand may have impacted the flow of funds, therefore explaining the cuts to the short-term ISA market.”

However, providers are not cutting fixed rates across the board.

Kent Reliance increased the rate on its one-year fixed ISA earlier this month by 0.2 percentage points to 1.8% and Dudley Building Society bumped its one-year fixed ISA by 0.15 percentage points to 1.71% on the first day of the new tax year.

“There is still plenty of opportunity for savers to find a best buy fixed cash ISA,” says Springall.