Strict savers could soon reap the benefit of their 1 Year Fixed Rate ISA maturing if they opened the account with the max £20,000 allowance.
Savers could get a hefty bonus nearing £1,000 in the coming months – but only if they opened a certain account. On 19 March 2024, Nationwide Building Society opened its One Year Fixed Rate ISA and 2 Year Fixed Rate ISA – launched at an AER of 4.50% and 4.20% respectively.
The tax-free accounts allow customers to save up to £20,000 every financial year – and is great for those able to lock their money away and lock in at a certain interest rate. This means these accounts won’t be affected even if the Bank of England’s base rate decreases, like it has done in recent months.
The interest is paid on the anniversary of the date you opened your account, at the end of the term, and on the day your account closes. This means those who opened the 1 Year Fixed Rate on its inauguration will soon have access to their money – and a hefty return.
If you put in the maximum £20,000 into the ISA on day one, you will have earned a whopping £900 in interest by the time the account matures, which works out around £75 per month. If you opened the account with £1,000 – you will have earned £42. Those who opened the 2 Year ISA will have to wait until 2026 before they can access their savings.
While Fixed Rate ISAs are a great way to avoid hostile interest rates, they aren’t for everyone. Because this is a lump sum account, you can’t add more money to it once it’s been opened – meaning it will only appeal to those who have substantial savings in the first place.
If you need to withdraw money from the account, you’ll have to take out all the funds and close the account. This will then be subject to an early access charge equivalent to 60 days’ interest.
Those wanting to open Nationwide’s 1 Year Fixed Rate Cash ISA today will receive a smaller interest rate of 4.10 % AER. The 2 Year Fixed Rate Cash ISA account is no longer advertised on the bank’s website. As previously reported, Nationwide is making some major changes to the majority of its savings accounts starting 1 February. These include:
Nationwide slashes interest rates – full list
Regular Savings
- Help to BUY ISA – 0.25%
- Continue to Save – 0.20%
Children’s
- Child Trust fund/ Smart Junior ISA – 0.25%
- Smart limited access – 0.25%
- Future Saver (with main current account) – 0.25%
- Smart Saver – 0.25%
- Smart – 0.25%
Limited Access
- 1 Year Triple Access Online Saver (all issues) – 0.10%
- 1 Year Triple Access online ISA (all issues) – 0.10%
- Loyalty Single Access ISA – 0.10%
- Limited Access Saver/ Limited Access Online Saver – 0.20%
- e-Savings Plus – 0.20%
- Triple Access Saver/ Triple Access ISSA – 0.20%
Instant Access
- Flex Instant Saver – 0.25%
- Loyalty Saver / Loyalty ISA – 0.10%
- Flexclusive ISA/ Flexclusive Saver * – 0.15% – 0.25%
- Instant Access Saver 10 – 0.15%
- Instant access savings accounts (eg Instant Access Saver, Instant iSA Saver, CashBuilder)* – 0.15% – 0.25%
“We have worked hard to limit the impact of the recent rate cut on our savers and have taken the decision to hold rates on some of our most popular accounts, such as our leading Flex Regular Saver,” said Nationwide’s Director of Retail Products Tom Riley. “Following these changes, our savings range will remain competitive. We returned a record £950 million in member financial benefit in the first half of this year and we’ll continue to give savers every reason to put their money with Nationwide.”
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