Nationwide launches market-leading ISA

Published by Nathalie Bonney on 14 July 2011.
Last updated on 15 July 2011

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Nationwide is to launch a new market leading fixed-rate ISA paying 3.3%.

The 18-month Loyalty fixed-rate ISA is to be introduced tomorrow, alongside the launch of its 18-month Loyalty fixed-rate bond, which pays the same amount of interest.

Currently, only Barnsley Building Society and Chelsea Building Society match Nationwide's 3.3% rate on their fixed ISA deals.

Competitive

Nationwide's director for savings Robin Bailey says:

"The fixed-rate market continues to be a competitive place for savers looking to tie their money in for a fixed period at a rate of interest that won't change."

Both savings accounts can be opened with balances of just £1, but are only available to existing Nationwide customers.

Bailey says this demonstrates Nationwide's "commitment to offering long-term good value", and "our promise to reward existing savers".

The maximum that can be deposited into the ISA is £5,340 – the annual ISA limit, while savers can pay up to £5,000 into the bond or £10,000 if it's a joint account.

Savers will lose 180 days' worth of interest for closing either one of the Loyalty accounts early.

Andrew Hagger, spokesperson for comparison site Moneynet, recommends savers use the ISA before the fixed-rate bond because of the tax incentives:

"If you haven't made use of your annual tax-free allowance, then the ISA option should be your first port of call as it will immediately save you the 20% [or 40% for higher rate taxpayers] tax on any interest earned."

 

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