In a move that has catapulted one of its financial products into second place in the best buy tables, Nationwide has recently upped the interest rate on its Champion ISA to 2.84 per cent.
Adjusted at the beginning of every month, Nationwide’s popular tracker ISA is tied to the five highest paying cash ISAs that are available to High Street bank branches.
Nationwide made the announcement that the Champion ISA’s rates would be raised to 2.84 per cent just this past Wednesday. At an increase from November’s 2.78 per cent rates, the current rate will stand until the 1st of January 2011.
As the average rate has fluctuated at other personal and business bank account providers throughout the past 12 months, Nationwide’s Champion ISA has been as low as 2.34 per cent, as it was in August, and as high as 2.8 per cent, which it reached in the months of both April and May.
This month’s upwards rate adjustment is similar to what occurred in October. Moreover the rate held firm into November, which are indications that savers will be happy with the return to some semblance of stability in a post-recession economic climate.
While Nationwide’s ISA does hold a second place ranking on the best buy tables, there are some issues with the offering.
The rate attached to the Champion ISA is inclusive of a 1.35 per cent bonus, which is payable in June of next year. This means that the highest paying accounts on the High Street that the Champion is based on attract only 1.49 per cent, which is far below the inflation rate in the UK.
Last month, the consumer price index, a widely used measure of the rate of inflation, stood once more at 3.1 per cent. This is over one percentage point higher than the government’s 2 per cent target.