Santander has joined the growing list of banks and building societies that are announcing the rates on their Help to Buy Isa.
This follows Halifax and Nationwide, which announced their rates over the weekend, paying 4% and 2% respectively.
Santander will pay an interest rate of 1.5%, rising to a preferential rate of 2% for Santander 1|2|3 World and Select customers.
First-time buyers can make deposits of up to £1,200 within the first month of funding the account, and up to £200 monthly thereafter, in line with scheme rules.
Santander also allows transfers in of up to £1,200 from another cash Isa.
Under the scheme, the Government will also make contributions of 25% up to £3,000 per person when they buy their first home.
Once the account has a balance of £1,600 it qualifies for a government bonus, meaning even those looking to purchase a property within the next three months could benefit from the scheme.
Helen Bierton, head of savings at Santander, said: “Santander is really pleased to be supporting this important new government initiative to help first time buyers in the UK onto the property ladder.
“Our new Help to Buy Isa gives savers the opportunity to build a tax-free savings pot and then benefit from a boost to those savings with the government bonus.”