Nationwide slashes interest rates on savings accounts

Nationwide Building Society has cut the interest rate on three of its popular savings accounts in a blow for savers.

While some of the best savings accounts on the market offer around 5% on cash savings, the new issues of Nationwide's savings accounts will fall to a low of 4%.

Nationwide's rate cuts come ahead of the Bank of England's base rate meeting which will take place this week, 19 December. While the Bank of England has now cut rates twice, dropping to 4.75% in November, it is widely expected that the base rate will stay on hold this week.

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Since last month's rate cut, there has been a shift in savings accounts, with rates now dropping. While Nationwide has been popular for member perks such as the £100 Fairer Share Scheme and 8% regular savings account, are the new rates still attractive in the wider market?

Which Nationwide accounts will see a rate cut?

Nationwide will cut the rates on the new issues of its One Year Triple Access Online Saver and One Year Triple Access Online ISA today, which now pay 4% AER (variable) for 12 months.

The previous issues, which paid 4.1% (variable), were pulled from sale on 15 December 2024.

Both accounts allow three withdrawals during the 12-month term; the interest rate will drop to 1.75% (variable) if you make more than three withdrawals. With the previous issue, the rate would revert to 2% for the remainder of the period.

After 12 months, the accounts automatically switch to an instant access account.

The new issue of the Flex Instant Saver, which is exclusively for current account customers, pays 3% (variable) - a drop from 3.25%.

There is no limit on withdrawals from this account.

Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Despite higher rates existing on the market, Nationwide Building Society is an esteemed provider and is widely trusted by consumers.”

She said despite interest rate cuts, some “may be willing to accept this as they have faith in the brand” but warned: “Savers would be wise to keep a careful eye on competitive deals and are willing to switch when their loyalty is no longer being repaid.”

Where can I find the best savings rates?

Savers have more choice than ever, new data shows, with product choice increasing month-on-month to 2,117 savings deals (including ISAs) - the highest count on Moneyfacts’ records since February 2007.

Currently, you can get as much as 4.85% on the best easy access savings accounts.

If you are looking for the best regular savings account, you can earn as much as 8%.

For cash ISAs, you can earn up to 4.75% on the best cash ISAs.

If you are willing to lock your cash away for a year, you can currently earn as much as 4.8% on the best one year fixed savings accounts.

"If you're looking to put money into cash savings, now is the time to act as savings accounts rates have already reached their peak and the only way they are going now is down," adds Kalpana Fitzpatrick, digital editor on moneyweek.com.