The Cumberland Building Society has launched a Help to Buy ISA with a market-leading interest rate of 4.0 per cent.

The Help to Buy ISA – short for Individual Savings Account – was launched by the Government in December to give first-time buyers a leg up on the property ladder by topping up the money they save towards a deposit.

Someone buying their first home can save up to £200 a month, earning tax-free interest. The Government will add a 25 per cent bonus to whatever they save, paid at the point they are ready to buy.

The maximum bonus is £3,000.

Some banks and building societies launched products immediately. But the Cumberland bided its time and has come up with a Help to Buy ISA that goes straight to the top of the 'best buy' tables.

Only Halifax and Santander have comparable products.

Most providers – including Virgin Money, Barclays, Lloyds, Bank of Scotland, Clydesdale, HSBC, Nationwide Building Society, Aldermore and NatWest – pay between 2.0 and 3.0 per cent interest.

Allister Green, business development controller at the Cumberland, said: “As a building society, we believe we have a responsibility to help first-time buyers.

“As well as offering a range of award-winning, extremely competitive first-time buyer mortgages, we make sure our first time buyers receive honest and personal advice from a friendly face.

“Now, with a Help to Buy ISA offering a market-leading rate, we can really make sure our first-time buyers have the best start on the road to owning their own home.

"Help to Buy ISAs are a great way to save for your deposit.” 

The Help to Buy ISA is available only to first-time buyers, although couples buying together can each have one each.

In addition to the monthly savings limit of £200, there is an opportunity to deposit a lump sum up to £1,000 when the account is opened.

The bonus can only be put towards a first home in the UK, up to £250,000 in price (£450,000 in London), used by the buyer as their only residence and not buy-to-let.

Savers can open a Help to Buy ISA at any time until November 2019. There is no time limit on how long they save.

The Cumberland, based in Carlisle, is Cumbria’s largest financial institution and the UK’s 10th largest building society with assets in excess of £1.9bn.

It has more than 140,000 customers and operates 34 branches in Cumbria, south west Scotland, Lancashire and Northumberland.