Nationwide raises interest rates on savings accounts – but can it compete with inflation?

Sunak's inflation arguments 'are not the right ones' says Clarke

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Earlier today, the country’s Consumer Price Index (CPI) rate was confirmed to have risen to 10.1 percent in the year to July 2022. This follows a series of recent hikes to inflation which have resulted in the Bank of England raising the base rate to 1.75 percent to better support savers. Among the many high street banks and building societies that have increased their interest rates for their savings accounts is Nationwide.

Last week, the building society hiked the rate on its One Year Fixed Rate Bond/Online Bond to 2.35 percent AER/gross p.a. (fixed).

At the same time, Nationwide increased the interest rate of its Two Year Fixed Rate Bond/Online Bond to 2.70 percent AER/gross p.a. (fixed).

The financial institution’s Five Year Fixed Rate Online Bond saw its rate go up to three percent AER/gross p.a. (fixed).

All of these rates are the highest provided by any high street bank or building society, according to

Each account is available for balances of up to £1 or more and can be opened by visiting a local Nationwide branch.

Alternatively, customers can open these accounts by visiting Nationwide’s website or using its online app.

The building society has also confirmed it will be withdrawing its Member Online Bond and one and two year Fixed Rate ISAs at the same time.

As well as this, Nationwide raised the rate on its Triple Access Online Saver to 1.50 percent last month.

The building society also launched a new issue of 1 Year Triple Access Online ISA which is paying an interest rate of 1.35 percent.

Tom Riley, the director of Banking and Savings at Nationwide, explained why the building society is raising rates at a time of high inflation.

Mr Riley said: “Our Triple Access Online Saver and ISA accounts pay some of the highest rates on the market and will appeal to those wanting to save with a well-known high-street brand that they trust.

“At the same time, we are also increasing rates on our fixed rate bonds offering competitive rates for those who want to lock their money away for a period of time.”

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Cameron Parry, the CEO of Tally Money, shared what today’s inflation announcement means for savers.

Mr Parry explained: “These days they haven’t a hope of doing that. Even after this month’s increase in the Bank of England base rate, the interest paid by high street banks won’t come close to beating inflation any time soon.

“So keeping your money in a standard savings account – or even a cash ISA – is barely any better than keeping it under the mattress. Your money will continue to lose value in real terms.

“Having some emergency cash in a savings account is fine, but it is a terrible long-term investment.

“With inflation set to surge even higher in coming months, it makes more sense to hold your savings in an asset that is insulated from inflation.”

Martin Lawrence, the director of Investments at Wesleyan, added: “Right now, many will be reviewing their finances and seeing what changes they need to make to cover the increases in fuel, food and other bills.

“Some will have very limited options, but for those who do have choices and are fortunate enough to have savings, it’s important not to make short-term decisions that could have far reaching consequences over the longer term.

“This includes stopping pension contributions, or dipping into investments designed for longer time periods – steps that could affect how much people have available when they reach retirement.”

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