Nationwide cuts savings rates by 1.44%

Friday, 28 November 2008 12:00

Nationwide has announced new rates which mean good news for mortgage borrowers but bad news for savers.

Following the Bank of England's interest rate cut earlier this month, the building society is cutting its base mortgage rate (BMR) by 1.5 per cent from Monday, December 1st.

However, from the same date, it is also reducing interest rates across its savings and banking accounts by an average of 1.44 per cent.

The building society is reassuring savers by highlighting a number of savings accounts which have rate guarantees. Its Monthly Income 60+ account is guaranteed to match or better the Bank of England rate until January 31st, 2011, it said.

Meanwhile its Smart, Cash Child Trust Fund and Regular Savings accounts are also guaranteed to hold rates, based on the Bank of England's, until January 2010.

Matthew Carter, divisional director of savings for Nationwide, said: "Like all providers, we have to manage our portfolio of accounts in relation to current market conditions.

"We passed on the full 1.5 per cent cut to mortgage borrowers following the decrease to the base rate, and therefore also need to pass on the cut to our savers, to ensure our business can remain both competitive and sustainable over the long term."

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