Coventry BS has pulled its market-leading Poppy ISA, replacing it with a new two-year Cash ISA.
Coventry's Poppy ISA was launched shortly after the start of the new tax year and paid out 2.60%.
Although this rate isn't that exciting, it was the market-leading ISA. It came with a bonus of 1% attached for the first year, and didn't allow transfers in from previous ISA allowances. Savers flocked to open the account, leading to its withdrawal.
Unfortunately The Coventry isn't the only provider to have pulled one of its ISAs. Leeds Building Society and Santander both withdrew similar accounts just days after the new tax year began.
As rates are so dismal right now, thanks to the Government's Funding for Lending Scheme (FLS) which has given providers access to cheap money, savers are desperate to get their hands on whatever interest is offered.
This time last year the average cash ISA rate was 2.65% and now it's a lowly 1.82%, far below the current 2.8% rate of inflation.
The replacement ISA
The replacement ISA is paying a lower rate of 2.55% and is a two-year fixed-rate account.
This means you're not able to get your hands on the cash for the two-year period and you can also only open it by putting in this year's full cash allowance of £5,760.
Here's how it compares
As you can see, unless you have the full ISA limit to invest, the Coventry ISA is not much use.
Our article - The best Cash ISAs for the new tax year – lists the rest of the new accounts still available.
Alternatives to ISAs
As with the whole of the savings market right now, the ISA offering has been dismal and there is not a lot to choose from.
One option if you've got savings to put away is a standard savings account, but the rates aren't much better here and you don't get the same tax benefits.
Peer-to-peer lending is another option and the rates on offer are around 5% - so much higher than you would get from a savings account. These work well because you liaise directly with the person you are lending money to and therefore you can set the interest rate you want.
Choosing a current account which pays interest is another choice. Nationwide pays 5% and Santander pays up to 3% so with both of these you're getting a better rate than if you put the money into a savings account.
You can read about other options in our article - The best alternatives to Cash ISAs.