Nationwide Building Society recently announced its Champion ISA with competitive rates. However after only ten days on the market, the banking provider has already slashed its interest rate.
Interest on the ISA is set to fall to 2.5 per cent for new savers, down from its previous level of 2.84 per cent. Existing savers with the building society will experience a large portion of interest directly removed starting June of next year.
The ISA savings offering from Nationwide has traditionally been popular with savers. The attraction is the ISA’s interest rate, which is taken from the average of five of the top paying branch ISAs. The Nationwide offering also adds its own bonus to the rate.
The Champion ISA rate had recently gone up at the beginning of December. As the five accounts it had been linked with had gone up, the Nationwide offering’s rate rose to 2.84 per cent, up from 2.78 per cent.
Many savers expect that the Nationwide account would hover around that high rate. This is due to the relatively constant nature of the accounts the Champion ISA tracks.
Only 1.49 percentage points of its rate are taken from the five account average, however. The remaining nearly 2 percentage points is Nationwide’s added bonus. This bonus portion is what Nationwide has significantly reduced recently.
The new bonus now stands at just 1.01 per cent for new savers, down from 1.35 per cent previous.
Those who signed up for the ISA before the rates were lowered are in luck. The 1.35 bonus will persist until June of next year.
However Nationwide is electing to not move any of its existing savers to the reduced rate after the June expiration. Instead these existing savers will lose their bonus rate entirely. This can be avoided by savers by specifically informing the building society to switch them to the new, albeit lowered, rate.