First-time home buyers who plough their money into a new Isa scheme will benefit from interest rates as high as four per cent.

The Halifax has come up with the best deal so far for the UK Government backed initiative which begins on Tuesday and aims to help people save for a deposit comes from the Halifax.

The interest rates are far in excess of any other Isa product on the high street as competition hots up for customers.

It was followed by Nationwide, which is to offer savers using the investment vehicle two per cent interest and access to a range of other perks.

Charlotte Nelson, a spokeswoman for Moneyfacts, described the Halifax's offer as a "fabulous deal".

She said: "It looks like the competition is now on to entice these new savers and to be seen as the first-time buyers' choice."

From Tuesday, first-time buyers saving for a deposit will be able to put up to £200 a month in a dedicated Isa that the Government will top up by 25per cent - meaning a £50 bonus for every £200 saved.

The maximum Government bonus that someone can receive is £3,000. To receive that, they will need to have saved £12,000.

To kick-start their account, first-time buyers can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly £200 maximum deposit.

Couples will also be eligible if they are buying together, meaning a potential boost of up to £6,000 towards a deposit for a first home.

As well as the promise of Government cash, the rates announced so far compare well with the cash Isa rates on the market generally.

According to financial information website Moneyfacts, the average cash Isa rate stands at 1.48per cent.

More providers are expected to unveil what they will offer under the scheme soon. The list of others who have confirmed they will be taking part includes Barclays, Santander and HSBC.

Nationwide said its Help to Buy customers will be offered access to the Society's "save to buy" mortgage range, which offers additional cashback.

Another advantage of Nationwide's deal is that it will also allow Help to Buy Isa savers to spread their Isa balance across more than one Isa product with the Society, enabling them to save up to the full annual tax year Isa limit of £15,240.

To qualify for a Help to Buy Isa generally, someone must be a UK resident aged 16 or over buying their first property.

The property must be in the UK, and cost up to £250,000, or up to £450,000 in London. It must not be bought as a buy-to-let property. The property must be mortgaged in order to be eligible for the Government bonus.

While people saving into a Help to Buy Isa are not obliged to take out a mortgage with the bank or building society providing their Isa when they come to buy their home, many may well go on to do so.

Earlier this week, Chancellor George Osborne unveiled a package of measures designed to help people onto the housing ladder.

But experts have warned that the drive must not leave those who are not home owners without somewhere affordable to rent.

Campbell Robb, Shelter's chief executive, has said that a "key test" for the measures will be whether they will work for people on average and lower incomes.

People from next week can save up to £200 a month into a dedicated Isa that the Government will top up by 25per cent to a maxiumum of £3,000.

First-time buyers can also open their account with a one-off lump sum of up to £1,000 on top of the monthly maximum.

Couples buying together can combine their bonuses, meaning a potential boost of up to £6,000.