Nationwide slashes rates on savings

NaTIONWIDE has cut the introductory rate on its flagship current account by more than half – in a blow to savers.

The building society slashed the popular 5pc rate to just 2pc.

From May 1, Nationwide’s Flex Direct current account will pay the new interest rate on balances up to £1,500 for the first 12 months. after that period, the rate will revert to 0.25pc.

The account has been paying customers 5pc on balances up to £2,500 for the first 12 months, followed by a rate of 1pc. Nationwide

said it is the first reduction to the credit interest rate on Flex Direct since the account was launched in November 2012.

Many other providers have slashed their savings rates over the years in the low interest rate environment, while Nationwide had left its untouched. The society claimed that despite the change, Flex Direct continues to offer one of the highest rates of credit interest on the market.

The move follows the Bank of England’s recent decision to cut the base rate to a record low of 0.1pc. Nationwide said any Flex

Direct accounts applied for before May 1 will continue to receive credit interest of 5pc on balances of up to £2,500 for the remainder of the 12-month introductory period. Existing Flex Direct customers who have had their account for longer than the introductory 12-month period will have the rate reduced to 0.25pc on balances up to £1,500, from July 1.

Sara Bennison, who oversees Nationwide’s products, said: ‘In order to preserve the longterm sustainability of the society for all our 16m members, we have had to take these decisions on the interest rates we can offer.’