A finance expert has shared some advice for customers considering switching their savings account
Nationwide Building Society customers have been advised to carefully consider the advantages of their current accounts.
Account holders might be contemplating a switch following the latest base interest rate reduction in August, which saw rates drop from 4.25 per cent to 4 per cent.
This typically encourages savings providers to cut their rates as well, giving customers incentive to hunt for superior deals. Financial specialists at NerdWallet have offered guidance on key considerations for those looking to make a switch.
READ MORE: HMRC rule change coming for UK households who gift family members moneyREAD MORE: Major high street bank to cut account charges in a few weeks
The organisation cautioned potential switchers about the importance of noting any bonus benefits they receive from their existing provider, reports the Mirror.
Amy Knight, personal finance expert and business commentator with the group, explained this is particularly relevant for Nationwide savers.
She remarked: “Be mindful of any perks you currently enjoy, which you would miss out on if you move your money.
“For example, Nationwide recently paid a £50 ‘thank you’ to 12 million members with a current or savings account, on top of a £100 ‘fairer share’ payment issued for the third consecutive year to 4 million members with a current account.”
The £50 Nationwide Big Thank You represented a token of gratitude to devoted members following the organisation’s successful acquisition of Virgin Money.
The Fairer Share Payment is distributed as Nationwide’s method of sharing profits with members, with a £100 payment also distributed last year.
Ms Knight offered another piece of advice for Nationwide customers contemplating a switch: “If you currently have a Nationwide account and are considering switching, it’s worth using an interest calculator (such as the Bank of England’s savings calculator) to work out whether the extra interest you could earn would exceed any loyalty payments you’ll receive if you stay put.”
Ms Knight also urged savers considering a switch to carefully consider when they might need to access their funds. She explained: “To get, and keep, the most favourable rates on the market, you’ll need to be prepared to keep withdrawals to a minimum.
“Many accounts with generous interest rates limit the number of withdrawals you can make before the rate gets cut significantly. For this reason, a separate emergency fund – which you can dip into any time without being penalised – is a good idea.”
Numerous easy access savings products and fixed rate accounts continue to provide rates of 4% or higher. Nevertheless, rates may fall if the Bank of England reduces the base rate once more.
Mark Hicks, head of Active Savings at Hargreaves Lansdown, believes now presents an excellent opportunity to secure a fixed rate.
He explained: “For money you don’t need for a specific period, it’s well worth considering locking in a fixed rate deal now. You can get fixed terms around 4.5% – far beyond any expectations for inflation.
“This will be fixed for the full period, so even when the Bank of England starts cutting rates again, your deal is secured.”
For all the latest news, visit the Belfast Live homepage here and sign up to our daily newsletter here.
#Nationwide #savings #account #holders #issued #payment #alert
