Nationwide Loyalty Saver 0.3% rate drop

taylornj

Another here who just received their letter from Nationwide about Loyalty Saver issue 4 reduction from 1.5% to 1.2% from 1st April, letter dated 24th Feb, arrived 10th March.

I like the panel on right hand side that says "And as soon as we bring out a new savings account we'll e-mail you. so you'll know if you can get a better rate.", and over the page we have their fixed rate e-bonds at a very generous 1.25%. I don't expect any e-mail about better rates for a long time, and foregive me if I don't take up the fixed rate offering.

Looking on the bright side, that's less tax I shall be paying.

Mr_Prudent

Quote:" You can say that's 'taking the p**s' or 'they are running a dictatorship' or you can calmly shop around for the best deals for your circumstances".

But that’s the point, it’s meant to be a loyalty account for 15 years LOYALTY. You should not have to shop around for an account that pays a better rate for NO LOYALTY, especially from a building society that you are supposed to be a member of and has no shareholders to pay dividends to.

talexuser

Frankly I'm amazed you guys are getting hot around the collar about nothing more than marketing talk. Calling something loyalty is just PR puff, they never claimed to have the best rate all the time, just a good rate, as it happened, at the time you opened it. They could have had a lower rate to open, the PR just weighs whether there would be too much laughter and ridicule at the opening publicity puffing loyalty.

The rest is just the same as always, diarise and swap when the rate drops... it's now a normal way of life we have to get used to.

p.s. I also have an issue 4, and opened the National Counties 1.41% a couple of weeks ago just in case the rate dropped too far after a year of opening. I'll start shifting my balance near the end of the month.

p.p.s anyone know offhand the fast pay limits for flexdirect since I thought you can only withdraw to another nationwide account, then send on from there?
edit: I think it's 10 thousand.

ColdIron

I think it's £10,000 as well
http://www.nationwide.co.uk/support/support-articles/important-information/faster-payments#xtab:payment-limits

2010

It is £10k but you can do more than one FP in a day.

bowlhead99

Mr_Prudent wrote: »

Quote:" You can say that's 'taking the p**s' or 'they are running a dictatorship' or you can calmly shop around for the best deals for your circumstances".

But that’s the point, it’s meant to be a loyalty account for 15 years LOYALTY. You should not have to shop around for an account that pays a better rate for NO LOYALTY, especially from a building society that you are supposed to be a member of and has no shareholders to pay dividends to.

You are always going to have to shop around if you want the best deal which is one of the reasons this site exists.

Nationwide is the biggest building society in the country with many members who all have conflicting needs (e.g. - you would prefer to earn 2% or more on your deposits, someone else would prefer to only pay 2% or less for their mortgage upon which they may default) and meanwhile needs to preserve its balance sheet and meet the various regulatory requirement. They are not trying to offer the highest rates to savers and the lowest rates for borrowers so that the two overlap in the middle with no room for running costs and the whole thing goes bust.

So, getting a better rate for having an account with them for a long time (in this case a premium of one third over what they offer to a newer member) can't possibly guarantee it will always be the best rate in the market compared to every other opportunity out there at all times. You are going to be able to beat it if you shop til you drop. Nationwide has no hope in hell of winning the best buy for everything as they can't continually pay more on deposits than the average of their rivals while charging less for mortgages and loans than the average of their rivals.

Sure, the longstanding customers receiving the 33% loyalty boost may find that for some types of accounts they do better by going to rivals, and it is certainly the case that you can beat 1.2% if you shop around between product types. If you accept restricted access rather than unlimited instant access you can equal or beat it at Coventry or Virgin, but that is a different type of product. If you don't accept restricted access you would only get 1.21% as a new customer at Virgin which is not materially better and at Coventry you would be getting less.

I was only picking those names as they were mentioned in this thread. If you pick others out of a hat like YBS or Chelsea they are only paying the 1.2% if you accept limited access on only three days a year. If you look at Aldermore which floated today, they have had a history of winning best buy awards in recent few years but at the moment you can only get a 1.25% rate if you take a monthly notice account which is similarly a less flexible product.

So, while clearly that's just a sample of different account types and there are lots more which might outpace Nationwide (especially if you include accounts no longer available, like the 1.41% one at National Counties), it does not exactly make them evil dictators in my book. It has long been the case in all kinds of industries (including financial services) that if you shop around for any product you can do well as a new customer signing up elsewhere rather than sticking with what you have. Because accounts open to new customers are sometimes loss leaders.

But actually if you are a 'loyal' Nationwide customer and you jump ship to Virgin to be a new customer there you will not get a materially better interest rate than your 1.2% on the same instant unlimited access product, and if you jump ship to Coventry you will not get as much on the same instant unlimited access terms and if you jump ship to YBS or a 'challenger bank' like Aldermore you will not get the same rate either.

So, the implication that Nationwide for loyal customers is significantly worse than if you went elsewhere as a non-loyal customer - I don't really buy it. Loyalty elsewhere might be better than loyalty at nationwide but loyalty at nationwide vs new customer elsewhere is not too bad.

Mr_Prudent

Bowlhead, I completely agree with you regarding shoping around if you can find better rates else ware. I too have accounts with different providers as well as shares, ISA’s, bonds ETC, but you’re missing a very basic point. The largest mutual in the country could well provide better rates for long standing depositors for the reasons I mentioned(no shareholders) but have cynically cut rates because they think (indeed can)get away with it. It is not a case of “stop moaning” and move your money, there is a principle at stake here. Not voicing your protestations at how this mutual treats the very people who provide the funds so that others can enjoy cheep mortgages is just letting them off the hook. Believe it or not the comments from sites such as this do not go unnoticed; they might get ignored but not unnoticed!

Totton

Called into Nationwide today to ask what was the best option following the drop on my FlexDirect and Flex savings accounts, they suggested to open another FlexDirect account as you can have one in a single name plus another in a joint name a/c. The suggestion as to open each account at 12 month intervals so as to keep the 5% rate. It all seems a little daft to have to keep opening a new a/c every 12 months but that was their suggestion.

Strangely the FlexDirect current a/c dropped from 5% to 1% interest but that's still higher than they are giving me on the Flexeclusive savings a/c (0.9%)

So, I opened a new Flexdirect a/c in a sole name but left all the DD's in the joint account,I'll arrange for the £1,000 monthly payment to go to the new account. After 12 months we'll go back to open a new joint Flexdirect a/c. Crazy!

SallySunshine

When a bond matured a few months ago, I put it in my Loyalty account while I had a think what to do with it.
I had countless e-mails, a phone call and several letters inviting me to call in for a chat about investing the money.
Then a letter about the drop in the rate.

Just applied for a Challenger account 1.75% with 95 day notice.
If the variable rate drops, they have to give 2 weeks notice and you can withdraw your money without any penalty.

bristolleedsfan

Totton wrote: »

Called into Nationwide today to ask what was the best option following the drop on my FlexDirect and Flex savings accounts, they suggested to open another FlexDirect account as you can have one in a single name plus another in a joint name a/c.

So, I opened a new Flexdirect a/c in a sole name but left all the DD's in the joint account,I'll arrange for the £1,000 monthly payment to go to the new account. After 12 months we'll go back to open a new joint Flexdirect a/c. Crazy!

You could have had an extra 80.00+ had you opened the account via TCB or Quidco

http://www.quidco.com/nationwide-flexdirect-current-account/?ac

http://www.topcashback.co.uk/nationwide-flex-direct/