Spotlight On: Coventry's 2011-12 ISAs

The deal

Coventry Building Society has launched three fixed rate ISAs for next year's tax-free allowance.

The good points

You can shelter £5,340 from tax in an ISA next year and these rates look competitive. Over a year you'll get 3.1 per cent, until May 2014 it's 4.15 per cent, and lock cash away until May 2016 and you'll get 5 per cent.

The bad points

You have to lock your money away to get these rates. If you have to withdraw it early you'll be charged a whopping 120 days' interest. It's annual interest only which will be paid on 31 May.

Conclusion

If you want flexibility from your savings then you should avoid fixed rates. If you think savings rates will rise in the next 12 months or so - as most commentators do - then you may want to avoid fixing too, as there may be better rates available later on. But it is timely to think about next year's ISA as by using your allowance from next Wednesday rather than waiting until the end of the tax year means getting an whole 12 months' extra interest. But wait and see what other deals are available before committing.