Nationwide has raised the interest rates on six ISA and savings accounts up to 4.55%. The range includes two Fixed Rate Cash ISAs – either a one or two year term – and four Fixed Rate Bonds, which can either be managed in branch or online.
A fixed rate Cash ISA allows you to save money tax-free while earning a fixed rate of interest for the agreed term. Unlike a standard savings account, any interest earned is sheltered from income tax. Meanwhile, a fixe rate bond is not automatically tax-free. Savers lock away their money for a fixed period in return for a guaranteed interest rate.
All of the two-year accounts, whether it is an ISA or fixed rate bond, are being offered at 4.55%. This means if you put away £1,000, you would earn £93 by the end of the term. If you opt for the one-year account at 4.5%, you would earn £45.
You must be comfortable with having your money locked away for a certain amount of time, because once the cancellation period has ended, you cannot withdraw any money until the account matures.
Richard Stocker, Nationwide’s Head of Savings, said: “We’re pleased to be increasing rates on our one- and two-year Fixed Rate Bonds and Fixed Rate Cash ISAs for the second time this month.
“These products are ideal for those looking to put money away for a shorter period while benefiting from the certainty of a guaranteed return.
“Customers can access the same rates whether they choose to save online or in branch, reflecting our commitment to choice and our Branch Promise, backed by the UK’s largest branch network.”
AlRayan Bank is offering a 1 Year Fixed Rate Cash ISA with an interest rate of 4.72%, which is slightly higher than Nationwide.
For a two-year ISA, Aldermore is offering the best rate, according to Moneyfactscompare.com, with 4.72% on its 2 Year Fixed Rate Cash ISA.
If you are swaying towards a fixed-rate bond, Investec Save has a two-year Fixed Rate Saver for 4.95%. If you would prefer to keep your money away for one year, the AlRayan Bank 1 Year Fixed Term Deposit is currently being offered at 4.9%.
