The Nationwide Building Society offers a range of savings accounts. Higher interest is available on fixed rate bonds, regular savings accounts and ISAs.
Choosing savings accounts
Nationwide instant access savings accounts are flexible, allowing the saver to deposit or withdraw funds at no notice, but do not earn as much interest as other Nationwide accounts. The CashBuilder passbook account and card account both offer rather low rates of interest compared to other Nationwide products. The e-Savings account offers a slightly higher interest rate for savings online. Attractive interest rates may be achieved with the Regular Savings account, which allows savers to contribute up to £1,000 per month and gives higher interest rates for greater monthly increases in the balance. Savers putting away large amounts each month may therefore achieve higher interest rates. Savers who are prepared to lock their money away for a certain period of time, between six and eighteen months, in a fixed interest account may earn higher interest rates with Fixed Rate e-Bonds. More attractive rates are available for higher amounts saved.
Individual savings accounts
Individual savings accounts (ISAs) are an investment in which money may be saved tax free up to an overall limit of £10,680 in a tax year (for 2011/12). A Nationwide cash ISA has a contribution limit of £5,340 but the remaining balance or the whole of the annual allowance could be saved in a stocks and shares ISA. An ISA may be opened by an individual over the age of 16 (for a cash ISA) or 18 (for a stocks and shares ISA). The Nationwide offers an instant access ISA, an online e-ISA and a Champion ISA where 60 days notice of withdrawal is required. A higher savings rate is available on the online ISA and on the 75 day (notice period) ISA. The best interest rates are available from fixed rate ISAs, which the Nationwide offers for terms between one and three years, and which allow higher interest rates for higher amounts invested.
Investment funds accessed through stocks and shares ISAs may be chosen according to the risk rating and management style. Varying levels of fees apply. Investors should bear in mind that the past performance of a fund is not a guide to future performance, and that investments in shares may go down in value.
Protected Equity Bond
Investors looking for more limited risk may consider the 6-year Protected Equity Bond. This investment may be made within an ISA or as a deposit plan. The return is linked to the growth of certain stock market indices, up to 55% of the investment over six years. Where the indices fall, the original investment remains intact but without the return.