Nationwide is paying customers with £1 in their bank account free money

James Rodger

10 November 2024 at 3:32 pm·2-min read

The building society has announced new rates ahead of Christmas, explaining the Fixed Rate Cash ISA is designed for savers looking to lock their money away for a fixed term. — -Credit: (Image: Reach Publishing Services Limited)

Nationwide is offering a new interest rate on its Cash ISA - offering bank account holders the chance to make more from their cash. The building society has announced new rates ahead of Christmas, explaining the Fixed Rate Cash ISA is designed for savers looking to lock their money away for a fixed term.

Your interest rate won't change during your fixed term. The new interest rate is 4.10% AER/tax-free (fixed) and withdrawing money before your term ends closes the account and an early access charge will apply. Nationwide said: "Our Fixed Rate ISAs are no longer available for new account openings.

"We now offer Fixed Rate Cash ISAs. If you've held a Fixed Rate ISA before, there are several differences between these two types of ISAs to be aware of." Certain savings accounts suit certain types of savers, the building society adds, explaining it's ideal for savers willing to lock away their money for a fixed term.

Savers with a lump sum to deposit and savers looking for an interest rate that won't change could also benefit. But the accounts are not designed for either savers who want instant access to their money or savers who want to put away money on a regular basis.

A cash ISA generally allows UK residents aged 18 or over to save up to their annual ISA allowance tax-free each tax year. The allowance is £20,000 for 2024/25. With other savings accounts, you may have to pay tax on the interest you earn, depending on your Personal Savings Allowance.

The interest on a cash ISA is tax-free, so all the interest you earn, you keep. Myron Jobson, senior personal finance analyst at interactive investor, said: “Savings rates have seen little change in recent weeks, but the overall trend has been downwards since the start of the year in anticipation of the BoE lowering rates in the future.

“Falling interest rates present an opportunity to revisit and adjust your savings strategy. The simple message is to act quickly to secure the best savings deals before they are gone. The best savings rates are seemingly on borrowed time.”

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