Nationwide slashes savings rate by 25%
Nationwide Building Society is the latest big provider to cut rates for new savers. Its Limited Access Saver Issue 3 pays just 0.9% before tax (0.72% after) and restricts you to five withdrawals a year.
It's a hefty 25% cut from the 1.2% (0.96%) on its previous issue, which was withdrawn from sale on Friday.
Top rates on easy-access accounts are on offer from Post Office Online Saver at 1.4% (1.12%), including a bonus for the first year. Coventry BS pays the same on its PostSaver but limits you to 12 withdrawals a year.
The top deal with no bonus and no withdrawal restrictions comes from Skipton Building Society's Limited Edition E-Saver at 1.25% (1%). But as its name implies, it is unlikely to be around for long.
On fixed-rate bonds, best deals include 1.76% (1.41%) with the tiny National Counties Building Society for one year, 2.25% (1.8%) for two years from Harrods Bank, and 2.4% (1.92%) for three years from Close Brothers.
On easy-access tax-free cash Isas you can earn 1.5% including a bonus for the first 18 months with Post Office Premier Isa.
National Savings & Investments also pays 1.5% - with no bonus - but you can't transfer your existing cash Isas into this account. For transfers, Barclays pays 1.49% on a minimum £30,000 with no bonus.
The top fixed-rate deal on cash Isas for one year comes from Virgin Money at 1.7%, while Post Office pays 1.95% for two years.
This article was written for our sister website Money Observer
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.