This comes as banks and building societies are increasingly looking for different ways to help their customers during the cost of living crisis. One of the primary causes for the economic downturn is the soaring inflation rate, which has recently hit a 40-year high of 9.1 percent. Due to inflation hurting peoples’ savings financial institutions, such as Nationwide are responding with hiked rates across its full list of savings products.
Last month, Nationwide raised the introductory credit interest rate on its FlexDirect current account to five percent.
This move by the building society is estimated to assist members by up to £200 within a year if they switch over to their services.
People who chose to switch to Nationwide’s FlexDirect will also benefit from the financial institution’s switching incentive.
This deal gives £125 to existing members who switch their current account to the building society and £100 to new customers.
Debbie Crosbie, the building society’s chief executive, shared why interest rates are raised to this extent amid the cost of living crisis.
Ms Crosbie said: “Being able to offer highly competitive rates is one of the biggest benefits of mutuality.
“This market leading rate will help new and existing members make the most of their money, which is particularly important right now.
“The FlexDirect current account also has an introductory interest-free overdraft to give some peace of mind to those struggling financially and freeing them to focus on repaying other debts.”
However, the five percent interest rate for Nationwide’s FlexDirect current account is not the only hiked rate the building society has implemented.
The building society also launched a new issue of its popular Triple Access Online Saver which has an interest rate of 1.40 percent.
As part of this savings account, Nationwide allows three withdrawals during the 12-month term.
However, any further withdrawals will return the interest rate to 0.10 percent for the rest of the period.
Tom Riley, the director of Banking and Savings at Nationwide, emphasised why the building society’s latest interventions are to give its customers some “peace of mind”.
Mr Riley explained: “Many savers like to place at least some of their savings in an instant access account to give them peace of mind that they can access the funds should they need to.
“The new issue of our Triple Access Saver account pays one of the highest rates on the market and will appeal to those looking to save with a brand they know and trust.
“We always look to offer a wide range of accounts to suit the different needs of our members, which is why we have also increased rates for those who don’t need immediate access and want to save in a fixed rate bond or ISA.”