Coventry Building Society has launched a market-leading easy-access cash ISA paying a ‘top rate’ if 4.90 percent interest.

The savings account is available for both new and existing customers.

It allows four withdrawals every 12 months starting from the day the account is opened.

Subsequent withdrawals face a charge equal to 50 days’ interest.

This tax-free account can be opened with a minimum of £1 and savers can deposit up to £20,000 for the current tax-year.

Bethaney Cozens, savings product manager at Coventry Building Society, said: “The tax bills many savers are now facing has encouraged the take up of ISAs.

“We’ve opened almost as many new ISAs so far this year than the last two years combined, as ISAs have become an increasingly popular option for members wanting to maximise their tax-free savings allowances in a higher interest rate environment.

“Our new Four Access ISA Online offers members a market-leading rate while having flexibility to access their money four times each year for free, and is a great option for savers looking for a home for this year’s ISA allowance.”

The account offers annual or monthly interest, which can be added to the account or paid into a nominated account.

Savers can get an annual variable interest of 4.90 percent tax-free p.a./AER or monthly variable interest paid at 4.79 percent tax-free p.a., 4.90 per cent AER.

ISA transfers from this and previous tax years’ ISA allowances will be accepted.

This is a flexible ISA, meaning if someone withdrew from the account, they can redeposit that money within the same tax year without impacting their £20,000 per year ISA allowance.

The moneysavingexpert website has listed this account as  one of the “top easy-access cash ISA” paying “the top rate”. 

Cash ISAs saw record-breaking inflows of more than £3million in July, the Bank of England’s Money and Credit report revealed last month.

The sharp rise in savings rates has meant many savers could face the prospect of exceeding their annual Personal savings Allowance and being taxed on their interest income. Therefore, more savers have been sheltering money in tax free ISAs again to keep tax liabilities to a minimum.