In March last year, Nationwide Building Society launched it’s One Year Fixed Rate ISA and 2 Year Fixed Rate ISA, offering an AER of 4.50% and 4.20% respectively.
These accounts allow customers to save each financial year and are soon due to reach maturity.
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If you deposited the maximum – £20,000 – into the ISA on the first day, you would have made £900 in interest by the time the account matures, equating to roughly £75 per month.
The account is tailored for savers who are willing to lock away their money for a fixed term, those with a lump sum to deposit, and those seeking an interest rate that remains constant.
According to Birmingham Live, it is not suitable for savers requiring instant access to their funds or those wishing to save regularly.
A cash ISA typically allows UK residents aged 18 or over to save up to their annual ISA allowance tax-free each tax year. The allowance for the 2024/25 tax year is £20,000.
With other savings accounts, you may be required to pay tax on the interest you earn, depending on your Personal Savings Allowance.
However, the interest earned on a cash ISA is tax-free, meaning you retain all the interest you accrue.
You must be 18 or over to open a Fixed Rate Cash ISA. However, if you were aged 16 or 17 before 6 April 2024, you can also open one using money held in a Fixed Rate ISA or Fixed Term ISA Maturity with Nationwide.
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This won’t apply if you close your Fixed Rate ISA before the end of its fixed term. You must not have paid more than the annual ISA allowance into a cash ISA, a stocks and shares ISA, an innovative finance ISA and a Lifetime ISA in this tax year.
Additionally, you must be a UK resident for tax purposes or, if not, either be a Crown employee serving overseas or be married to, or in a civil partnership with, someone who is. Any money paid into the account must belong to you.
It cannot be held in trust for the benefit of another person.