The building society has confirmed it is launching a brand new two-year fixed rate ISA which pays a competitive interest rate of 3.90 percent. This new tax-free savings account from Coventry Building Society can be opened by customers for as little as £1. Up to £20,000 annually can be deposited into this ISA by savers, according to the financial institution.

Furthermore, any ISA transfers from 2023 and previous years’ ISA allowances will be accepted by the building society.

The new two-year fixed rate accounts can be opened either online, by phone, post or visiting a branch.

Last week, Coventry Building Society launched a one-year fixed bond savers which paid a competitive interest rate of 4.10 percent.

Savers can deposit anywhere between £1 minimum and up to £250,000 in this particular savings product.

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Matthew Carter, the head of savings at Coventry Building Society, shared why he believes the financial institution’s latest account is a boon for saves.

He explained: “Savers want a variety of choice when it comes to tax-free savings, that’s why we’re growing our range of accounts with a new two-year fixed rate cash ISA.

“In addition to our recently launched one-year fixed rate ISA paying a highly competitive rate of 3.80 percent, our new account means savers can now choose whether they want to fix their ISA interest rate for the short or medium term and take advantage of good value returns on their savings.

“We make it as straightforward as possible for people to open these accounts and to transfer in their current and previous years’ ISA funds to make the most of their tax-free ISA allowances."

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On the fixed bond, Mr Carter added: “Fixed bonds offer higher rates of returns than we’ve seen in a long time and add a layer of certainty to savings.

“With a minimum opening balance of just £1, our new fixed bond offers the best one year rate of interest of any major savings provider and is ideal for those looking for a good return on their savings over the short term.”

High street banks and building societies have hiked interest rates across their range of products in recent months in response to developments in the economy.

The Bank of England’s Monetary Policy Committee (MPC) has found itself raising the base rate nine consecutive times in the last year.

READ MORE: Recession fears continue despite UK economy growing

Ms Springall added: “Inflation continues to degrade the true spending power of savers’ cash, but this should not deter them from seeking out a new savings deal.

“Interest rates on some of the top fixed deals have dipped since last month, as savings providers moved to adjust their market positions.

"Savers will need to act swiftly to grab the latest deals, as more movement is expected over the coming weeks.

“Those savers who are prepared to lock their cash away for a guaranteed return can still find fixed rate bonds and ISAs paying above four percent, where the top rate tables continue to be dominated by challenger banks and building societies.”