Building society launches new ‘highly competitive’ ISA with 4.5% interest rate

has launched a new one-year fixed Cash with a “highly competitive” 4.5% .

The mutual, which launched the account to support its partnership with the UK’s youth homelessness charity Centrepoint, will donate 0.15% of the total balances held at the end of March 31, 2025.

Coventry Building Society separates this donation from the interest savers receive, ensuring no tax implications for account holders.

The One-year Centrepoint Fixed ISA 31.05.2026 can be opened with just £1 by phone, post, in branch or online and will accept current and previous years’ ISA savings.

Like with most fixed accounts, after the granted 14-day cancellation period, people cannot dip into their pots until the account matures on May 31, 2026.

Savers can close or transfer the ISA before this. However, the mutual will charge the equivalent of 90 days’ interest on the account balance.

Cash Individual Savings Accounts (ISAs) have become popular over the past years as higher . These accounts allow people to save up to £20,000 a year tax-free.

Fixed accounts also help add a layer of certainty to saving, as they enable customers to lock in the offered at the time of opening for the specified period.

Grace Taggart, savings product manager at Coventry Building Society, said: “We’re incredibly proud of our partnership with Centrepoint and the difference it is making in young people’s lives. With our new Centrepoint Fixed ISA, we’re aiming to raise donations to bring us closer to our next £1million milestone for 2025.

“We know that this charity savings account offers a fantastic opportunity for people to give back to their communities while also enjoying a competitive return on their savings.

“That’s why we’ve designed the Centrepoint Fixed ISA – to provide savers a way to support this vital cause simply by saving in a tax-free account. Every pound saved helps us support thousands of young people in finding a safe and secure place to call home.”

Ms Taggart added: “Our commitment to Centrepoint extends beyond our savings products. Throughout the years of our partnership, our colleagues have been fundraising, volunteering, and donating their time to help raise money across our branches and Head Office sites. We’re more committed than ever to making a real difference, and we hope our savers will join us in reaching this goal.”

While Coventry Building Society may offer one of the more competitive rates, it isn’t quite topping the table for one-year fixed ISAs.

Close Brothers Savings offers an Annual Equivalent Rate (AER) of 4.55% on larger minimum deposits of £10,000. Interest is paid annually, and earlier access is only permitted on closure and will be subject to a 90-day loss of interest.

Kent Reliance places just behind with an AER of 4.52% on a minimum deposit of £1,000. Interest is paid on maturity, and earlier access will also be subject to a 90-day loss of interest.