Along with virtually every other bank and building society Nationwide work hard at attracting savers. This is their latest offering and in truth it isn’t bad i.e. it is quite attractive. However it is locking savers into negative interest rates from the very beginning. June 2017 saw inflation of 2.9% and as a result the Nationwide’s best rate- 1.65% p.a.- is in real terms minus 1.25%. Worse: it could well be the case that inflation will accelerate over the five year duration of the bond- equally it might be the case that inflation has peaked at 2.9%. It’s a heroic assumption that both sides are making. And so it is a risky judgement for both the Nationwide and their customers.

This is their offer:-

What is the interest rate?

The interest rate on this account is dependent on your chosen length of term and whether you choose to have interest paid annually or monthly. Interest is calculated daily.

If you choose an Annual interest account:
Interest is paid annually on the anniversary of the account opening and on maturity. Interest can be added to your Loyalty Fixed Rate e-Bond, or paid directly to a Nationwide current account.

If you choose a Monthly interest account:
Interest is paid monthly and on maturity directly to a Nationwide current account.
Please note: When interest is paid monthly, it can’t be added to the Loyalty Fixed Rate
e-Bond, and must be paid into a Nationwide current account.