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This news comes as savers are looking for the best ways to safeguard and boost their finances during the cost of living crisis. One of the factors exacerbating the cost of living issue is inflation reaching a 40-year high of 9.1 percent. Experts believe the UK’s inflation rate could reach as high as 11 percent which is causing households concern.
As a result, banks and financial institutions, such as Nationwide, are launching new issues of existing products and hiking interest rates in a bid to assist savers.
Earlier this week, the building society confirmed that it was launching a new issue of its One Year Triple Access Online Saver.
This particular account allows savers to make up to three withdrawals within the 12-month term.
Any further withdrawals will turn the interest rate back to 0.10 percent for the rest of the period.
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After 12 months, the account automatically switches to one of Nationwide’s instant access accounts.
As well as this, the building society confirmed it was hiking interest rates across its loyalty accounts.
Existing members who use either Loyalty Saver, Loyalty ISA and Loyalty Single Access ISA accounts will see rates rise by 0.25 percent to 1.25 percent gross/AER from August 1, 2022.
While none of these rates match the 9.1 percent inflation affecting savers, they do compare well against similar products on the market.
As of last week, the new hiked rates by Nationwide Building Society are:
Tom Riley, the director of Banking and Savings at Nationwide Building Society, explained why the financial institution has chosen to hike rates during the current cost of living crisis.
Mr Riley said: “Many savers like to place at least some of their savings in an instant access account to give them piece of mind that they can access the funds should they need to.
“The new issue of our Triple Access Saver account pays one of the highest rates on the market and will appeal to those looking to save with a brand they know and trust.
“We always look to offer a wide range of accounts to suit the different needs of our members, which is why we have also increased rates for those who don’t need immediate access and want to save in a fixed rate bond or ISA.”
With inflation beating the rate of many savings accounts, including ones managed by Nationwide, savers are concerned about what possible returns they will get.
On this, Alice Haine, a personal finance analyst at Bestinvest, said: “Savers that might have been celebrating the Bank of England’s latest quarter-point hike in the base rate to 1.25 percent won’t be partying for very long.
“While banks and building societies are slowly edging up the savings rates they offer, this is little comfort for savers who are already seeing their cash pots gobbled up by rising prices – delivering a negative real rate of inflation on their savings.
“However, it is still important to have some cash stored in an easy-access savings account as an emergency backup for any unexpected expenses, so shop around for the best rates to ensure every penny is working as hard as it can.
“If you can afford to lock away money for a longer-term horizon, such as five to 10 years, then investing into an ISA or SIPP could be an inflation-beating strategy.”
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