Nationwide Building Society has issued an update regarding changes to its interest rates affecting certain customers, following an enquiry from a customer about their savings account.
Customer query sparks clarification
The customer asked via social media: "When a fixed rate bond has matured and if it is left to turn into an instant access maturity bond account, can I then just add money to it and treat it like a normal savings account?"
Nationwide offers a Fixed Rate Online Bond, which provides a fixed interest rate throughout the account period. Customers can choose from 1, 2, 3, or 5-year fixed terms, with all bonds currently offering a 4 per cent interest rate.
What happens after maturity
Once the bond matures, the funds are moved into an instant access account. The Nationwide website states: "At the end of the term, we will move your money to an instant access savings account. We will let you know before this happens and what your interest rate will be."
Responding to the customer, Nationwide confirmed that the instant access account can be used like a standard savings account. The building society said: "Yes, that is correct. If your money is in an instant access account, you can add and withdraw money as you like."
Warning over interest rate drop
It is important to note when your bond matures, as it could lead to a significant reduction in your savings rate. Nationwide's Instant Access Saver currently pays only 1.1 per cent on deposits up to £10,000. This represents a 3.9 percentage point drop from the 4 per cent fixed rate.
Slightly better rates are available for deposits above £10,000, but the maximum is just 1.2 per cent. This is far below the best-paying savings accounts on the market. Nationwide current account holders can opt for the Flex Instant Saver, which pays 2.3 per cent variable.
Fairer Share payment coming
Millions of Nationwide customers will soon receive a bonus payment. The building society is rolling out another round of its Fairer Share payment, with £100 heading to more than four million members. This scheme distributes profits among members. Full eligibility criteria are available on the Nationwide website.
