Nationwide slashes rates on its best buy ISA by wide margin

Up until yesterday, Nationwide’s Flexclusive ISA had been grabbing headlines with its massive 4.25 per cent interest rate  – that is until it slashed its rates by 0.75 percentage points.

Earlier this week,  a spokesperson confirmed that the UK’s largest building society was planning to adjust the rate on their best buy offering, but neglected to say when or by how much.  However, media outlets received an anonymous tip – one that was destined to prove right – that the rate drop would take place yesterday.

The rate drop, while massive, still leaves the Nationwide savings product in a competitive place, as it now shares an interest rate with two ISAs from its rivals – Cheshire Building Society and AA Savings.  However, the Nationwide deal’s limitation – that it is only open to customers with the building society’s Flexaccount current account – leaves it as a much less attractive choice now that the rate of return has fallen by three-quarters of a percentage point.

Industry experts say that savers looking for a more lucrative rate and that are not yet with Nationwide may be better off looking for a competitor.  Those wishing to transfer balances from previous years should look into a provider such as Santander, as they accept transfers into their 3.3 per cent ISA, unlike both Cheshire BS and AA.

Lucky for anyone who had already taken up the Nationwide ISA, their rates are locked in at 4.25 per cent rate for the next 12 months.  While the end result will be a difference of around £44 if you had deposited the maximum £5,640 cash ISA allowance, the figure is a substantial one when it comes to comparison to the other low-paying accounts currently on the market.

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