A regular saver ISA account with a 2% rate has been launched by Nationwide Building Society partly as a response to some of the criticism they have received after slashing savings rates to a number of other facilities recently.
This new facility has the proviso that a maximum of £1,270 can be put into the account each month. The 2% on this account is the same rate as the one offered through Nationwideís non-tax free scheme.
After welcoming in the new tax year on 6 April 2015, Nationwide outlined a number of cuts to savings rates, including on some of their loyalty accounts.
However, this new account gives customers the ability to grow their tax-free pot throughout the year. If a customer was to meet the £1,270 maximum each month in savings, they would reach a total of £15,240 for the entire year- this is the ISA allowance for the 2015/16 tax year.
To further incentivise this scheme, Nationwide have made it relatively flexible for the account holders. Under the rules, the saver is permitted to forgo a monthly payment. Furthermore, they are able to put into the account as little as £1 for each month. If the customer wishes to make a withdrawal to get hold of some cash quickly, there is no penalty.
In addition, the deposit limit of £1,270 for each month will be nullified on 1 March 2016, allowing potential savers to put in the full annual allowance of £15,240 immediately if they wish.
Considering the 2% rate offered, if a consumer was to save the maximum amount possible in this account for each month, they would accumulate £164.60 in interest across the course of twelve months. This is significantly better than compared with the most competitive easy-access cash ISA on the market that would provide the customer with £123.54 across a year.
However, those with a large lump amount saved up already looking to put it into an account are still better offer considering a fixed-rate cash ISA account or an easy-access facility compared to a regular saver like this one.
For example, with a pot of £11,000, one could transfer this into an easy-access account paying out 1.5% and make £166 in interest across the course of twelve months.
Overall, this new account from the building society seems attractive considering a number of other deals and also the plummeting rates across the rest of the market. However, some have commented that it is still significantly less appealing than the regular saver with a 2.5% rate that Nationwide introduced last year.
This regular saver ISA can be opened by customers either in branch or by going online. After a period of twelve months, the account transmutes into an instant ISA saver paying out at 1.25%.
The new tax year in 2015 has commenced in a relatively quiet manner with only a few attractive offers being publicised. Leeds Building Society had launched the most appealing deal, increasing the rate on their three-year fixed account to 2.2% whilst Aldermore Bank have introduced a one-year fixed deal giving out 1.65%.