Where to save? (Nationwide's poor rates)

Sapphire

This is the response I received from Nationwide today regarding their interest rates:

Thank you for your enquiry.

We currently have no planned date to increase interest rates. However, to comply with the Banking Code, Nationwide informs members of the changes to savings interest rates, which apply to their
accounts by the following methods and timescales.

Advertisements in National newspapers within 3 working days of the change.
By placing notices within branches within 3 working days of the change.
By having the new interest rates available on our telephone help line and our website within 3 working days of the change.
By letter to all members with postal or Internet accounts within 30 days of the change.

Regards,

The Internet Team
Nationwide Direct

Based on that response, I shall be withdrawing my savings from their accounts.

Thanks again, everyone, for the help.

Milarky

You'll see from the above link that they have just upped their fixed rates:

PRODUCT UPDATE

Nationwide has today announced that it will replace its existing range of fixed rate bonds with a new range paying up to 5.30% gross p.a./AER, following movements in the swap rates available on the money markets.

Nice of them to tell you in their reply! But more generally, they could have announced the full range of changes on the same day - including the rates on the major accounts - instead of drip-feeding the information.

The Flexaccount rate is good (4.25%) but for balances over £3000 it isn't - thus you need a an e-savings account (4.55%) anyway if this becomes your main account. (e-savings is little use as a general savings vehicle however because it can run without a flex.)

What I think they should also bring out is an ongoing competitive regular saver rate of maybe 6% - not just 12 months - but then they have a problem that existing 'bonus saver' accounts (with big existng balances) could miss out unless it was of the 'great rate for 12 months' variety - and therefore not payable on existing balances. Perhaps that is why they have stayed out of this?

Mr_Mumble

homersimpson wrote:

where did you get this information from? nationwide said they couldn't tell me because they have to wait until management board met. where is everyone else transfering isa to?

Don't you feel their answer to you about when they'll change rates rather odd considering they announced new mortgage rates a week ago?

Sorry if I've mislead here. The first sentence of what you quote was my conjecture - actually born out by todays announcements of some fixed rate increases, most of which are only by 0.20%.

As for when exactly they will increase their rates I should have made clearer that was my own flippant remarks about how long they're taking and the rumour most BSes will wait until late August/early September before announcing most rate rises:

Changes on most ISA rates are expected early next week, but most building society customers will have to wait until the end of the month to find out how, or if, returns will be affected.

Link (penultimate paragraph)

Sapphire

I decided not to wait and see whether/by how much Nationwide would up their interest rates for their easy-access savings accounts and have just transferred the bulk of my savings to the Post Office Instant Saver. I can always transfer them back if by a miracle Nationwide can more than match the PO rates.
+++++

Earlier this year I transferred my Northern Rock Isa (didn't read the small print advising they dropped the bonus payment thus making it 3.75% after 12 months) and after searching around found the Saffron Waldon offering 5.30.
_____

I've also checked the rates for the Saffron Walden ISA and they don't seem to go above 4.75%. :cool:
+++++

codetown

Nationwide used to have much better rates few years ago. It was probably not top of the league, but always good. Things have changed very radically in the last 1-2 years. i think this is down to management decisions as reading the accounts numbers you see they have eash year huge 'profits' (which they put aside calling 'a reserve' as a mutual cannot have profits). I don't believe the story of low numbers of mortgages.
Much smaller BS (see Coventry) offer better deals and they cannot have all the business that Nationwide has.

As for ISA savings. Have you thought of putting it back in the A&L Direct ISA? If you opened in the right period (accounts opened from 09/01/06 to 11/04/06; Accounts beginning with 607, 608) you still have a good interest rate of 5.2% and that applies to anything, new money in and old transfers.
It is due to a bonus valid up to end of April 2007. And they accept transfers from past years.

steady__eddie

Saffron Walden I.S.A. is here http://www.swhebs.co.uk/savings/display.product.php?category=tax-free&productID=t4
Beware however that 5.3% includes an introductory bonus of 0.8% for the first 6 months, after that .......4.5%. or is it ?
In their sales pitch, they say "The underlying variable rate (currently 4.50% tax-free/AER p.a.) is linked to the Bank of England Base Rate" This was extracted from their website today, now we all know that B.O.E. rate is currently 4.75% don't we ? Perhaps they don't, or they haven't had chance to update their website yet. If that is the case, then they are paying 5.55% currently, dropping to 4.75% in 6 months time.......unless the B.O.E. say otherwise !

homersimpson_3

also beware of £30 transfer fee:
"You may transfer your current year's subscriptions in whole, and previous tax years' investments in whole or in part, to another ISA manager, at any time, by giving us notice in writing. If you give us less than 30 days notice you will lose 30 days interest on the amount transferred. If you choose to transfer your account to another ISA provider, a £30 administration charge will also apply. "
say you transfered 3k in sept from nationwide into account with saffron walden would it still be worth doing so even if you paid £30 transfer fee?

steady__eddie

Just a quick update on the I.S.A. from Saffron Walden, at the time of writing the rate still shows 5.3 % on their website but it is shown as 5.55% on text on B.B.C. 2 page 256 subpage 3.

thor

codetown wrote:

Nationwide used to have much better rates few years ago. It was probably not top of the league, but always good. Things have changed very radically in the last 1-2 years. i think this is down to management decisions as reading the accounts numbers you see they have eash year huge 'profits' (which they put aside calling 'a reserve' as a mutual cannot have profits).

I could not agree more! I pulled my nearly all my cash out of there about 3 years ago when I noticed that their mini cash isa rates were beginning to look very average. The only benefits of mutaulity that the NW will provide is when they float on the stock market and give us our well earned shares!!!!

MiserlyMartin

I hate to say this but you are right. They no longer have decent savings rates, let alone market leading. I am an avid supporter of building societies but they are now acting like a plc. They now may as well float - the rates are about the same as a plc so no benefit anymore or reason not to get shares!

So what other alternatives are there to esavings (4.5%)? I already cleared £33,000 out of there into ICICI, but I don't want to put more than that in there. I have an old Cahoot account which has now increased from 4.55% to 4.8% following the base rate move. Are there any other instant access online accounts?