Nationwide launches new 4.20% interest rate offer

Martin Lewis advises on moving your savings into ISAs

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The financial institution confirmed earlier today (December 9) it is introducing new issues of its Fixed Rate Online Bonds. The two particular savings accounts which will be affected are the Two Year Fixed Rate Online Bond and the Three Year Fixed Rate Online Bond, with one of the products offering a 4.20 percent rate. This latest move from Nationwide Building Society comes amid a wave of interest rate rises which have been introduced amid the UK’s ongoing cost of living crisis.

Following the building society’s latest intervention, the Two Year Fixed Rate Bond will now pay a rate of 4.10 percent.

Furthermore, Nationwide’s Three Year Fixed Rate Bond is now paying an interest rate of 4.20 percent.

These savings accounts, and their attached interest rates, are available for balances of £1 or more.

Savers interested in taking advantage of this offer can open either of the Online Bonds account through the Nationwide website, Internet Banking or the financial institution’s app.

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The building society’s previous Two and Three year Fixed Rate Online Bonds were withdrawn at close of business on December 8, 2022.

It should be noted that the previous interest rates on the One Year Fixed Rate Online Bond and Fixed Rate Bonds are unchanged.

Currently, Nationwide’s One Year Fixed Rate Online Bond pays customers an interest rate of four percent.

Recent changes to the rates of these accounts come as the financial institution has made similar decisions over Nationwide’s traditional savings options.

At the beginning of this month, the building society carried out rate increases on all of its off-sale variable rate savings accounts.

As a result, Nationwide increased interest rates across this range by up to 1.50 percent in a major boon for savers.

Among the affected accounts were the Flexclusive Regular Save, Start to Save 2 and the Help 2 Buy ISA.

Tom Riley, the director of Retail Products at Nationwide Building Society, outlined last month why interest rates have been hiked in recent months.

Mr Riley explained: “We remain committed to supporting savers, which is why we have increased rates on all our off-sale savings accounts.

“In recent months, our average deposit rate has been at least 70 percent higher than the market average, demonstrating our mutual difference.

“Helping people develop a savings habit, particularly at this time, is core to the ethos of a building society.

“For this reason, one of our biggest increases was made to our regular savings accounts, which we hope will encourage those that can put money away to do so.”

What are Fixed Rate Bonds?

Unlike traditional savings products, fixed rate savings bonds guarantee customers a set interest rate over a specified term.

In comparison, the majority of savings accounts from banks and building societies pay a fixed amount of interest.

These bonds commonly see their interest paid annually to savers but some accounts will pay this interest quarterly or monthly.

Savers can usually nominate a separate bank or building society account for the interest to be paid into.

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