Nationwide increases bond rates

Nationwide Building Society has announced details of new rates for its one year Fixed Rate Bond, one year e-Bond and one year Guaranteed Savings Bond, which all offer guaranteed interest rates for savers.

The Guaranteed Savings Bond is exclusively available if purchased together with a six year Legal & General (L&G) Capital Guaranteed Multi-Index Equity Bond3 (GEB) as part of a Guaranteed Combination Plan.

With effect from Tuesday 8 September 2009, the new rates will be:

One year Fixed Rate Bond paying 3.25% gross p.a./AER for balances above £10,000 and 3.00% gross p.a./AER for balances below £10,000.

One year e-Bond paying 3.25% gross p.a./AER for balances above £10,000 and 3.00% gross p.a./AER for balances below £10,000.

One year Guaranteed Savings Bond paying 4.25% gross p.a./AER for balances above £10,000.

Rates remain unchanged on Nationwide's two year Guaranteed Savings Bond, six month, 18 month, two year, three year and five year Fixed Rate Bonds and e-Bonds, full range of Fixed Rate ISA Bonds and three year Stepped Rate Bond. The variable rate one year Tracker Bond also continues to be available and is guaranteed to beat the Bank of England Base Rate by 2.05% - 2.30% depending on account balance.

The Guaranteed Savings Bond is only available when a six year Legal & General (L&G) Capital Guaranteed Multi-Index Equity Bond (GEB) is purchased at the same time and for at least the same amount. The Guaranteed Savings Bond can only be opened as part of a Guaranteed Combination Plan from a Nationwide branch.

The 11th issue of the GEB, which is available as either a Deposit Plan or a Cash Individual Savings Account (ISA), offers the potential for growth linked to three stock market indices of up to 55% of the original investment at the end of six years, subject to final year averaging. If the maximum potential growth is achieved, this is equivalent to 7.57% AER. The GEB comes with an underlying capital guarantee that ensures, no matter how the markets perform, customers will still receive their original capital back if held to the end of the six year fixed term.

Andy Hutchinson, head of savings at Nationwide, said: "Nationwide's interest rate increase on its one year Fixed Rate Bond, e-Bond and Guaranteed Savings Bond is good news for savers who are looking for a guaranteed rate of return in the low interest rate environment. We continue to cater for a variety of savings needs by offering a competitive range of bonds, including Fixed Rate ISA Bonds, and terms range from six months to five years.

"For those interested in a longer term investment, Nationwide also provides an L&G six year Guaranteed Equity Bond. The L&G Guaranteed Equity Bond - although linked to the potential growth of three stock market indices - guarantees to provide 100% of a customer's original investment plus a return of up to 55% of the original investment, subject to final year averaging4, at the end of the term."

The previous one year Fixed Rate Bond, one year e-Bond and one year Guaranteed Savings Bond was withdrawn at the close of business on Monday 7 September 2009.