One major personal and business bank account provider has buckled to pressure placed upon it for a controversial ISA savings product it launched the second day of the new tax year after early-bird savers made use of their savings allowance the day before.
Nationwide, the UK’s largest building society, recently announced it will permit savers who missed its new 4.25 per cent interest rate cash ISA buy a scant 24 hours to switch to the better-paying account after savers and consumer campaigners protested the move. Savers were up in arms after discovering that there was an interest-free savings product with a better rate of return available but not permitted to transfer their newly-deposited funds to the better investment.
The new Flexclusive ISA, which is only on offer to Nationwide customers who hold a current account, beats out its competitors handily with its 4.25 per cent rate of return. Cheshire BS, AA, and Natwest all offer a maximum of only 3.5 per cent on their own ISA products, placing the Nationwide deal on the top of the best buy tables by a considerable margin. However, customers missed out on the deal, as the account – which was available on the first day of the new tax year, but was not promoted on the Nationwide website alongside the building society’s other deals – was not known to be available until the day after.
Long-time and loyal Nationwide customers felt quite let down after learning that the full allowance they wasted no time in depositing on April 6 went into a savings product that offered sub-par returns in comparison to the Flexclusive ISA. Adding insult to injury was the fact that Nationwide would not permit these customers to transfer into the better-paying account, despite the customer’s eligibility, but vociferous protests from many Nationwide customers, aided by campaign groups, have convinced Nationwide to permit anyone who took out an ISA with the building society to swap the cash for the better-paying rate.