Nationwide to increase rates on many savings products
Britain’s biggest building society will boost rates on a range of savings accounts by at least 0.15 percentage points.
Nationwide Building Society’s savings shake-up from February 1 will include rate rises on children’s and regular savings accounts, the society’s Help to Buy Isa, as well as its loyalty accounts.
The Bank of England base rate increased by 0.15 percentage points to 0.25% in December 2021, increasing costs for some borrowers.
In general, rate rises do not always filter through into better deals for savers.
Nationwide said it is passing on an above bank rate increase of 0.25 percentage points on children’s savings accounts.
To help encourage current account members to save regularly, the society will also bump up the rate on its Flex Regular Saver by 0.50 percentage points – to 2.50%.
The Flex Regular Saver allows someone to deposit up to £200 each month for a year and make up to three withdrawals during the 12 month-term without impacting the interest rate.
According to calculations from Moneyfacts.co.uk, a saver putting in £100 per month for a year would end up with around £16 in interest with the new 2.50% rate compared with around £13 previously.
Someone putting in £200 per month would gain about £32 in interest with the new rate, compared with £26 under the old rate.
Nationwide will also increase the rate on its Start to Save account by 0.25 percentage points to 1.25%.
Its Help to Buy Isa rate will increase by 0.25 percentage points to 1.25%.
Tom Riley, director of banking and savings at Nationwide Building Society, said: “In recent months our average deposit rate has been two-thirds higher than the market average, but we also need to balance our savings rates with the need to ensure we provide good value for our borrowers and continue to invest in services that are important for our members.”
The move could help some savers dealing with sharp increases in their living costs, although with Consumer Prices Index (CPI) inflation running at 5.4% they still face the real value of their cash being eroded.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said it was “fantastic” to see Nationwide passing the base rate rise on to its loyal savers.
She said: “One account to see a phenomenal rate rise is ideal for savers looking to start up a nest egg, as the Flex Regular Saver will pay a highly competitive 2.50%.
“Those savers who are getting a raw deal from their bank may wish to consider switching, as there is no guarantee they will see base rate passed onto them in the weeks to come.”
Published: by Radio NewsHub