Published On: Wed, Apr 5th, 2023

Coventry Building Society launches ‘competitive’ 4.2 percent fixed rate ISA | Personal Finance | Finance

Coventry Building Society is offering two “highly competitive” fixed rate ISAs including a one-year and a two-year product. Savers can open an account with just £1 with the option to transfer in ISA funds from the current and previous tax years.

The two-year fixed rate ISA has an interest rate of 4.2 percent, which is one of the top paying ISAs of this type.

The one-year fixed rate ISA offers an interest rate of 4.12 percent, which is the second highest rate behind Santander, which offers 4.15 percent for the same type of account, at the time of writing.

Savers can open an account online, by phone or post, or in a Coventry Building Society branch.

A person can move across up to £20,000 for the current tax year, as this is the maximum a person can currently deposit in ISAs under the current ISA allowance rules.


Matthew Carter, head of Savings at Coventry Building Society, said: “Many people will be looking to take action after reviewing their finances as the new tax year begins.

“Fixed rate ISAs are a popular option with savers looking for higher rates of interest as well as those who want a guaranteed rate of return over a set period.

“Our new set of one-and two-year fixed rate ISAs offer some of the highest rates on the market for both new and existing members who are comfortable fixing their money away in tax free savings.”

He said the building society is also making it “as easy as possible” for people to transfer in funds from other ISAs.

He said: “Those that managed to top up their ISA a couple days ago before the end of the last tax year, can now benefit from another £20,000 worth of tax-free savings per person as the new allowance resets today, meaning savers can start making the most of their new 2023-24 ISA allowance.”

as a person does not have to pay income tax on any deposits and they do not pay any tax on the fund’s growth or when they make withdrawals.

the base interest rate over the past year, with the rate currently at 4.25 percent.

Many banks and building societies have passed on the increases with some analysts expecting providers will continue to increase their rates.

The central bank has continued to increase the base rate in efforts to tackle mounting inflation, which is expected to drop significantly over this year.


Sarah Coles, head of personal finance at Hargreaves Lansdown,  in early May.

She said: “The Bank of England is expecting inflation to start falling rapidly from the middle of the year, and if it’s right, it will press pause on rate hikes.

“Depending on just how fast inflation falls – and what happens elsewhere in the economy, we may well get cuts further down the line.

“It means we may not see an enormous amount of upwards movement from fixed rate accounts from here.

“They will be priced based on what’s going to happen in the coming months and years, and if the banks are expecting rates to fall, they’ll get a lower fixed rate in the swaps market, so deals will start to drop.”

The analyst said changes to variable rates accounts have shifted less dramatically with the base rate hikes and analysts expect them to continue in the trend of gradually increasing.

Savers may be affected by . Ms Coles explained: “You’ll pay income tax on any interest on savings over the personal savings allowance, and given that the thresholds are frozen for another year, there’s the risk that more people will pay tax on their savings at a higher rate.

“If you have a reasonable sum of savings and you’re a higher or additional taxpayer – or you expect these things to be the case in future, you may want to consider a cash ISA.

“At this time of year, we tend to see banks competing harder for your money, and while the best ISA rates tend to be lower than their savings account equivalents, the gap will often close significantly in late March and early April.

“If you’re considering fixing for two years, for example, you can make 4.55 percent in a savings account at 4.26 percent in a cash ISA.”

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