Nationwide TESSA-ISA. Should I keep my cash there or switch?

DangerousDaveDur

Not sure this one can demand a definite answer but opinions are welcome....

I have £9000 invested in a former TESSA (now exTESSA ISA) with Nationwide. I'm not sure what the current interest rate is as I've found it's not listed on Nationwide's web site list of interest rates, but lets assume it is a poor as their regular ISA.

Now, normally the answer would be obvious - I should transfer it to a competitive account. However, I've always been afraid to close the account as it would mean I loose my "member" status and along with it any claim for a windfall should Nationwide become a bank. (I did open the account long before new investors had to sign away claims to any possible windfalls).

Back when I first had the account there were yearly votes going on about its future status, but it has all gone quiet on that front in recent years and I have little expectation that it will de-mutualise (?).

What do you guys thing I should do?

Goldenyears

Transfer to a competitive account (which may or may not be one of Nationwide's own products). Put windfalls out of your mind as a deal breaker. It's not going to happen.

opinions4u

DangerousDaveDur wrote: »

I have £9000 invested in a former TESSA (now exTESSA ISA) with Nationwide. I'm not sure what the current interest rate is as I've found it's not listed on Nationwide's web site list of interest rates, but lets assume it is a poor as their regular ISA.

It will be poor. But make the phone call to find out how poor.

Now, normally the answer would be obvious - I should transfer it to a competitive account.

You should. Look at www.moneyfacts.co.uk to see if competitors have a decent rate.

Alternatively, consider Nationwide's fixed or tracker ISAs. I assume these would keep continuity of membership.

However, I've always been afraid to close the account as it would mean I loose my "member" status and along with it any claim for a windfall should Nationwide become a bank. (I did open the account long before new investors had to sign away claims to any possible windfalls).

Would opening a new share account with Nationwide with £100+ continue your right to any windfall?

Back when I first had the account there were yearly votes going on about its future status, but it has all gone quiet on that front in recent years and I have little expectation that it will de-mutualise (?).

Well the rush to demutualise has been a roaring long term success.

Northern Rock - nationalised
Bradford and Bingley - nationalised
Alliance & Leciester - taken over by Santander for 80% less than their former value
Halifax - taken over by Lloyds, current value 98% lower than the peak.

None of the demutualised building societies remains independent, despite their floatation prospectus stating "this is a way to guarantee our strength, growth and independence in the future" - or similar sorts of phrases.

I doubt Nationwide will make the leap to plc status soon. Over a 3 year period you are probably losing more in interest than you'd gain in shares.

2010

Agree that a windfall looks unlikely but if you want to retain your membership,open another account with them and stick £100 in it.

NW current isa rates:

http://www.nationwide.co.uk/savings/cash_isa/

2010

opinions4u

Just had a look at your signature,made me chuckle.

Joe_Bloggs

I would have thought that you would get some kind of annual statement from the Nationwide regarding this investment. If you have fallen off their lists then contact them as said before by opinions4u.
You can move part or all of your past contributions to numerous ISA providers. You do not have to transfer all of it to a single provider.
J_B.

Stompa

opinions4u wrote: »

Would opening a new share account with Nationwide with £100+ continue your right to any windfall?

And if it doesn't, do they permit a partial transfer out?

evenasus

DangerousDaveDur wrote: »

I have £9000 invested in a former TESSA (now exTESSA ISA) with Nationwide. I'm not sure what the current interest rate is as I've found it's not listed on Nationwide's web site list of interest rates, but lets assume it is a poor as their regular ISA.

Your Tessa will be earning 0.25%

I would certainly transfer it to a fixed rate Nationwide ISA if you want to keep it with them. The least you would earn would be 2.21% for fixing for 6 months. Got to be better than 0.25%

baby_boomer

Transfer all but £100.

Nationwide can't hope to pay decent savings interest rates while it is only charging the vast majority of its mortgage customers only 2.5% so you don't want £9K with such a basket case institution that is coping only because of its good reputation and not its savings' rates.

But leaving £100 means that if Nationwide ever demutualises, you still have a stake which would entitle you to a vote and a potential windfall.

For all that Labour & Gordon talk about supporting mutuality, they are doing SFA to actually enable mutuals to raise new capital - and this would be the reason that Nationwide would cite if it ever chose to change course.

Santander is currently eating Nationwide for breakfast.

dc

DAVE better to go in a branch and ASK. They are owned by the customers so are not too biased with their advice.

baby_boomer wrote: »

Santander is currently eating Nationwide for breakfast.

Hardly comparing like for like, and though I agree on the 2.5%, BUT you wouldn't knock it if you like me had one. AND I like old fashioned

Not robbers like the "BANKS"

opinions4u

dc wrote: »

DAVE better to go in a branch and ASK. They are owned by the customers so are not too biased with their advice.

So if you walked in to a Natiowide branch to ask for a decent paying savings account, and the staff member knew that the bank next door had a better deal, what would the unbiased Nationwide staff member tell you?

Hardly comparing like for like

Nationwide and Santander are remarkably similar in size and product range in the UK. A very fair comparison.

Not robbers like the "BANKS"

To be honest, I see very little different to the way a so called mutual building society runs its business when compared to the way a high street bank works.

They still charge you when you exceed your overdraft, repossess your house when you don't pay the mortgage and screw savings customers who don't move their money to the front book new issue savings accounts every few months.

Explain the difference.

There's nothing Nationwide do that I can't get at the same or better price from a plc bank.