Some savers could earn hundreds of pounds more a year
Nationwide Building Society savers have been urged to weigh up the benefits of their accounts. Account holders may be thinking of switching after the base interest rate fell again in August, dropping from 4.25 percent to 4 percent.
This often prompts savings provider to also reduce their rates, giving customers a reason to shop around for a better deal. Finance experts at NerdWallet have shared some tips for what you should think through if you want to switch.
The group issued a word of warning for those thinking of switching, that it’s important to take note of any bonus perks you get with your current provider.
Amy Knight, personal finance expert and business commentator with the group, said this particularly applies to savers with Nationwide.
She said: “Be mindful of any perks you currently enjoy, which you would miss out on if you move your money.
“For example, Nationwide recently paid a £50 ‘thank you’ to 12 million members with a current or savings account, on top of a £100 ‘fairer share’ payment issued for the third consecutive year to 4 million members with a current account.”
The £50 Nationwide Big Thank You was a gesture of appreciation to loyal members after the group successfully took on Virgin Money.
The Fairer Share Payment goes out as a way for Nationwide to share its profits with members, with an £100 payment also issued last year.
Ms Knight shared another tip for Nationwide customers thinking of switching: “If you currently have a Nationwide account and are considering switching, it’s worth using an interest calculator (such as the Bank of England’s savings calculator) to work out whether the extra interest you could earn would exceed any loyalty payments you’ll receive if you stay put.”
Ms Knight also encouraged savers thinking of switching to be think through when they will need to access their savings. She said: “To get, and keep, the most favourable rates on the market, you’ll need to be prepared to keep withdrawals to a minimum.
“Many accounts with generous interest rates limit the number of withdrawals you can make before the rate gets cut significantly. For this reason, a separate emergency fund – which you can dip into any time without being penalised – is a good idea.”
Many easy access savers and fixed rate accounts still offer rates of 4 percent or above. However, rates could drop if the Bank of England cuts the base rate again. Mark Hicks, head of Active Savings at Hargreaves Lansdown, said no is a good time to lock in a fixed rate.
He said: “For money you don’t need for a specific period, it’s well worth considering locking in a fixed rate deal now. You can get fixed terms around 4.5% – far beyond any expectations for inflation.
“This will be fixed for the full period, so even when the Bank of England starts cutting rates again, your deal is secured.”