Money: Martin Lewis gives advice to 75-year-old on savings
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Last week, the financial institution announced the launch of a new wave of Fixed Rate Online Bonds and raised the rates of other savings accounts. This comes as the UK dealings with a skyrocketing inflation rate which is diminishing returns for savers. To address this, the Bank of England has raised the country’s base rate which has been passed on to Nationwide’s customers.
Following the building society’s decision, the following accounts have either been launched with the following rates:
- One Year Fixed Rate Online Bond – Four percent
- Two Year Fixed Rate Online Bond – 4.50 percent
- Three Year Fixed Rate Online Bond – 4.75 percent.
- One Year Fixed Rate Bond – 3.25 percent
- Two Year Fixed Rate Bond – 3.50 percent.
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In terms of existing savings accounts, Nationwide has raised the rate on the current issue of the 1 Year Triple Access Online Saver to a “highly competitive” 2.10 percent.
On top of this, the issue of the building society One Year Triple Access Online ISA is now two percent gross/tax-free per annum.
Each of these savings accounts allow three withdrawals during the 12-month term but any further withdrawals will see the interest rate revert to 0.30 percent for the remainder of the period.
Despite these recent increases, inflation remains at 9.9 percent which is high above any of Nationwide’s new interest rates.
Tom Riley, the director of Banking and Savings at the building society, shared why the financial institution decided to raise rates at this time.
Mr Riley said: “Our savings range continues to evolve to the needs of our members both today and tomorrow.
“The increases we’re making to the rates on the latest issue of our Triple Access accounts mean those who already have those accounts will benefit without needing to do anything.
“We also understand there are plenty of savers who are happy to lock their money away for a period of time, which is why we will be offering highly competitive rates on our Fixed Rate Online Bonds.”
In light of inflation’s impact on savings accounts, experts are sharing how savers can make the most of the existing rates which are currency on offer.
Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, discussed the difficulties faced by those looking to take out a fixed rate account.
Ms Coles explained: “Waiting for a better fixed rate is a perfectly reasonable approach, as long as you have answered two questions.
“At what point will you feel rates have risen enough for it to be worth fixing? And where will your cash be in the interim?
“It’s notoriously difficult to spot when rates have peaked, until after they have done so.
“So, if you hang on until it’s obvious, you’ll have waited too long. Instead, it’s worth making a decision about the interest rate you would be happy to fix at.
“If it takes months before rates hit this level, and your money is languishing in an account paying a fraction of one percent, you’ll be losing far more of the spending power of your money than you need to.
“It’s worth considering moving into a competitive easy access account – where you can currently earn up to 2.50 percent – until you’re ready to fix.”
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