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Nationwide cuts rates on nearly all savings and current accounts

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06/04/2020
Nationwide Building Society is to slash rates on almost all savings and current accounts following the Bank of England’s decision to cut the base rate to almost zero.

Among the big changes, the popular FlexDirect current account will pay 2% on balances of up to £1,500 for the first 12 months, down from 5% on the first £2,500 from 1 May. After the introductory period, the rate will revert to 0.25%.

Existing customers and anyone who applies for the account before 1 May will still receive 5% on balances of up to £2,500 for their 12-month introductory period.

Nationwide’s FlexStudent and FlexGraduate accounts will no longer offer interest from 1 July, while interest on the Society’s FlexOne will be reduced to 0.10%. These changes affect both existing account holders as well anyone opening these accounts from that date.

The society’s ‘Recommend a Friend’ bonus, which offers new customers referred to by a friend, and their friend, £100 each, has been put on pause from today (6 April). Any current account switches made before today will still qualify for the incentive.

Savings accounts impacted by the changes include the Limited Access Saver, which will fall from 0.5% to 0.05%, the Help to Buy ISA which will pay 1% from 2.5% and the Triple Access Saver/ISA which will fall to 0.10% from its current 0.75% and be withdrawn from sale.

However, there is some good news as the building society will keep the rate on its Start to Save account at 1% and continue to offer four prize draws offering customers a chance to win £100 if they save regularly.

In addition, the ISA prize draw will continue to run. This gives savers ten chances to win the top £20,000 prize. It is also offers ten prizes of £10,000 and 40 prizes of £5,000.

Rate changes for existing savers will be effective from either 1 or 15 May depending on product and the society said it will be writing to customers to notify them of the new interest rates.

Sara Bennison, who oversees Nationwide’s products and propositions, said: “We know that this is a tough time for savers, particularly after two cuts in Bank Rate in quick succession taking it to an historic low of only 0.10%.  In order to preserve the long-term sustainability of the Society for all our 16 million members, we have had to take these decisions on the interest rates we can offer on a number of our accounts.

“We have tried to remain as competitively priced as possible, with our FlexDirect account, for example, remaining one of the best in the market for credit interest and our savings prize draws helping people into good savings habits.”

Changes to existing savings accounts (effective from 1 or 15 May)

Product Current Rate New Rate
Child Trust Fund / Junior ISA 3.00% 1.00%
Flex Future Saver2 3.00%-3.50% 1.00%
Flex ISA2 0.70%-1.00% 0.01%-0.05%
FlexOne Regular Saver 3.50% 1.00%
Future Saver2 2.00%-2.50% 0.50%
Help to Buy ISA 2.50% 1.00%
Instant Access2 0.10%-0.25% 0.01%-0.05%
Instant Access ISA1 / Flex Saver2 0.30%-0.50% 0.01%-0.05%
Limited Access Saver2 0.50% 0.05%
Loyalty Saver / Loyalty ISA2 0.80%-1.10% 0.10%-0.25%
Loyalty Single Access ISA 1.40% 0.25%
Single Access ISA (Issue 1&2) 1.30% 0.25%
Single Access Saver / Single Access ISA (Issue 3) 2.00% 0.25%
Smart / Smart Saver 1.00% 0.10%
Smart Limited Access 2.00% 0.50%
Start to Save 1.00% 1.00%
Triple Access Saver / ISA 0.75% 0.10%
Triple Access Online Saver / ISA2 0.90%-1.21% 0.40%

 

Changes to Nationwide’s on-sale savings accounts (effective from Monday 6 April)

 

Product Current Rate New Rate
(Flex) Future Saver (3.00%) 2.00% (1.00%) 0.50%
Instant ISA Saver / Inheritance ISA / 0.30%-0.50% 0.01%-0.05%
Instant Access Saver 0.10%-0.25% 0.01%-0.05%
Triple Access Saver / Triple Access ISA 0.50% Withdrawn

 

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