Nationwide Building Society has issued an update about a change to its interest rates affecting some customers. The update came after a question from a customer about their savings account.
The customer asked over social media: “When a fixed rate bond has matured and if it is left to turn into an instant access maturity bond account, can I then just add money to it and treat it like a normal savings account?”
Nationwide offers a Fixed Rate Online Bond where you can enjoy a fixed interest rate over the account term. You can currently choose from a 1, 2, 3 or 5-year fixed term.
The interest rate for the bonds is 4 per cent and is the same across all accounts. Once the account has matured, the funds are moved into an instant access account.
‘We will let you know’
Guidance on the Nationwide website explains: “At the end of the term, we will move your money to an instant access savings account. We will let you know before this happens and what your interest rate will be.”
In response to the customer, Nationwide confirmed that they could use the instant access account as you would a normal savings account. The group explained: “Yes, that is correct. If your money is in an instant access account, you can add and withdraw money as you like.”
It’s definitely worth marking in your calendar when your bonds mature, as this could mean a significant drop in the interest rate that applies to your savings. At the time of writing, Nationwide’s Instant Access Saver pays just 1.1 per cent on deposits up to £10,000.
This would mean a 3.9 percentage point drop in your rate if your savings held in an online bond were moved over to this account. You can get a slightly higher rate if you have deposits in the instant access saver above £10,000, but the maximum rate you can get is only 1.2%, well below some of the top-paying savings accounts on the market.
Customers with a current account with Nationwide can also go for the Flex Instant Saver, which pays 2.3 per cent variable. The account has a one-year term, with your interest paid at the end of the term.
Millions of Nationwide customers will soon be getting some bonus cash landing in their accounts. The savings giant is issuing another round of the Fairer Share payment, with a £100 payment going out to more than four million members.
This bonus payment scheme is where Nationwide shares out its profits among its customers. You can read the full qualifying rules on the Nationwide website.