Nationwide reduces savings rates

Nationwide Building Society has announced details of its new savings and banking rates which come into effect on Monday 1 December 2008.

Following the one and a half point cut in the Bank of England Base Rate on 6 November 2008, Nationwide announced it will reduce its Base Mortgage Rate (BMR) by 1.5 percent from 1 December. As a retail financial services business, Nationwide has to ensure any changes to its mortgage rates are balanced by changes to savings rates. Therefore, from the same date, the Society will also be reducing the interest rates across its savings and banking accounts by an average of 1.44 percent.

Nationwide is committed to providing long-term good value to savers through accounts which are simple, straightforward and easy to understand. To ensure that the Society offers consistently competitive returns, a number of its savings accounts have rate guarantees to reassure savers.

Monthly Income 60+: AER guaranteed to match or better the Bank of England Base Rate until 31 January 2011;

Smart: AER guaranteed to pay at least 0.25% more than the Bank of England Base Rate until 1 January 2010;

Cash Child Trust Fund: AER (including additional bonus) guaranteed to pay at least 1.30% more than the Bank of England Base Rate until 1 January 2010;

Regular Savings: AER guaranteed to track changes in the Bank of England Base Rate until 1 January 2010.

Matthew Carter, Nationwide's divisional director of savings, said: "Nationwide is committed to providing long term good value to savers. However, like all providers, we have to manage our portfolio of accounts in relation to current market conditions. We passed on the full 1.5 percent cut to mortgage borrowers following the decrease to Base Rate, and therefore also need to pass the cut on to our savers, to ensure our business can remain both competitive and sustainable over the long term."