The competition among financial firms to attract savers is heating up, as Nationwide launches a new account with a market-leading interest rate of 8%. This comes in the wake of several interest rate rises by the Bank of England, which have increased savings rates across the board. Another rate hike is expected on Thursday.
While some easy-access savings accounts are only offering around 1% interest, financial data provider Moneyfacts advises savers to “ditch and switch” if their loyalty is not being rewarded.
Nationwide’s new account is exclusively available to its current account customers. In an effort to attract new customers, the building society is also offering a £200 payment to anyone who switches to them using the switching service.
The 8% interest rate lasts for a year, and customers can save up to £200 per month in the online-managed account. They are allowed up to three withdrawals within the 12 months, but if they make four or more withdrawals, the interest rate on the account will drop to 2.15%.
Several other savings accounts are now offering interest rates of 6% or higher. For example, First Direct’s regular savings account pays 7% interest, while the UK government’s savings bank, NS&I, offers one-year fixed-rate guaranteed growth bonds and guaranteed income bonds with interest rates of 6.2%.
The higher interest rates have sparked an increased interest in saving among the public.
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