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Nationwide ISA Review 2020 | Features, And Benefits

Here is a list of all the ISAs maintained Nationwide bank, alongside their features and benefits
Kane Pepi
Author: Kane Pepi

Last Updated: March 17, 2020

Nationwide Building Society Logo

Have some spare cash that you’d like to put to one side, while at the same time earn risk-free interest? If so, it might be worth considering a Nationwide ISA. In a nutshell, the UK building society offers a full range of ISA accounts, some of which pay more than others. Notably, the ISA that you opt for will depend on your current investment goals, and whether or not you think you are going to need to access your cash on-demand.

Nevertheless, if you’re thinking about using Nationwide for your ISA needs, be sure to read our comprehensive review. Within it, we’ll explore the different ISA accounts on offer, alongside their respective interest rates, eligibility, and whether or not you’ll be penalised for making a withdrawal.

While most Nationwide ISAs can be opened by anyone, some require you to already have a current account with the building society.

Pros and cons of Nationwide ISAs

The Pros

  • Backed by the FSCS – risk-free investment
  • Offers a variety of ISA types
  • Most accounts can be opened online
  • Usually get started from just £1
  • Some ISAs do not require you to open an account

The Cons

  • Interest rates are super-low

Nationwide ISAs: What ISAs are offered?

Nationwide Building Society logo

Nationwide Building Society offers a good selection of ISA accounts. Scroll through the following accounts to find one that meets your individual needs.

1. The 1 Year Triple Access Online ISA - 1.21% AER per year

The 1 Year Triple Access Online ISA available at Nationwide Building Society currently pays 1.21% interest per year. As this is a variable AER offer, the rate of interest can fluctuate – depending on market conditions. Notably, this is usually in response to a change in Bank of England interest rates.

Nevertheless, the 1 Year Triple Access Online ISA will allow you to make three withdrawals during the one year period, which is great if there is the slightest of chances that you think you might need to access the cash. As long as you don’t make more than three withdrawals in the 12-month period, you won’t lose any of the interest. All of the interest that comes with the 1 Year Triple Access Online ISA is tax-free, up to your annual ISA allowance.

Key Points:

✔️ 1.21% AER interest per year

✔️ Make up to three withdrawals per year without being penalized

✔️ Open the account online or via the mobile app

✔️ Variable interest – AER can fluctuate depending on market conditions

✔️ Tax-free interest

✔️ Must have a Nationwide current account or savings account

2. Fixed Rate ISA - up to 1.00% AER per year

If you’re looking for a fixed rate of interest as opposed to a variable rate that changes further down the line, then it might be worth considering the Fixed Rates ISAs currently being offered by Nationwide Building Society. The specific amount of interest that you are able to get will depend on how long you are happy to lock your money away for. At the time of writing, a 1 year, 2 year, and 3 year Fixed Rate ISA will pay 0.75% AER, 0.85% AER, and 1.00% AER, respectively.

As such, you will need to lock your money away for the full three years in order to get the highest rate of 1.00%. It is important to note that regardless of which lock-up period you opt for, you won’t be able to make a withdrawal until the term concludes.

On the other hand, Nationwide will allow you to transfer other ISA funds that you are holding elsewhere once you open the account, which is an added bonus. As is the case with the variable ISA account, all earnings are tax-free up to your annual limit, and the account can be opened online, but not via your mobile app.

Key Points:

✔️ 1 year lock-up: 0.75% AER interest per year

✔️ 2 year lock-up: 0.85% AER interest per year

✔️ 3 years lock-up: 1.00% AER interest per year

✔️ Fixed-rate of interest – cannot fluctuate during your fixed term

✔️ Tax-free interest

✔️ You cannot make a withdrawal until the term concludes

3. Inheritance ISA - 0.30% - 0.50%AER per year

An Inheritance ISA is suitable for those that have had a partner pass away, and they were in possession of an ISA. This allows you to earn interest on the account balance held in your deceased partner’s ISA account. Take note, you need to have been married to your partner (or in a civil partnership), as well as living in the same home.

Nevertheless, the Inheritance ISA offered by Nationwide Building Society pays between 0.30% and 0.50% AER. The specific rate that you get will be dependent on the amount of money that is currently in your deceased partner’s account. It is important to note that you can hold an Inheritance ISA alongside an ISA of your own.

In terms of the fundamentals, earnings made on the Inheritance ISA will be tax-free, and you can access the account at any time. As such, you won’t be penalized for making a withdrawal – albeit, this is reflected in the super-low interest rate being offered. Finally, you will not be able to make any transfers, and the account can be opened online or in a branch.

Key Points:

✔️ Between 0.30% and 0.50% AER interest per year

✔️ The specific rate that Nationwide offers you will be dependent on the account balance

✔️ You can make a withdrawal at any time without being penalized

✔️ Variable-rate of interest – it can change at any given time

✔️ Tax-free interest

✔️ No transfers possible

4. Instant ISA Saver - 0.30% to 0.50% AER per year

If you’re the type of person that doesn’t want to lock their money away, and thus, you need instant access at all times – then you might be best to stick with the Instant ISA Saver. This particular Nationwide Building Society ISA offers a measly interest rate of between 0.30% and 0.50%.

The overarching reason for this is that you will be able to make a withdrawal from your ISA at any given time – and not get penalized for it. In this sense, it operates in a similar way to a traditional savings account. With that being said, you might be able to find a conventional savings account that pays a higher rate of interest that the Instant ISA Saver being offered by Nationwide Building Society, so do bear this in mind.

Much like in the case of the Inheritance ISA, the specific rate that you are offered will be dependent on your account balance.  When it comes to the fine points, you can make as many transfers into your Instant ISA Saver account as you want, and all of the interest that you make is tax-free, up to your annual limit. Finally, you can open the account online or in a branch.

Key Points:

✔️ Between 0.30% and 0.50% AER interest per year

✔️ The specific rate that Nationwide offer you will be dependent on the account balance

✔️ You can make a withdrawal at any time without being penalized

✔️ Variable-rate of interest – it can change at any given time

✔️ Tax-free interest

✔️ Transfers in possible at any time

5. Stocks and Shares ISA - Interest % depends on investments

If you’ve got a slightly higher appetite for risk, or you simply don’t want to be making sub-1% per year, then you might want to consider a Stocks and Shares ISA at Nationwide Building Society. First and foremost, it is crucial to note that unlike the other four ISAs we have discussed, you stand the real chance of losing money if you opt for a Stocks and Shares ISA.

The reason for this is that the ISA simply acts as a Stocks and Shares account that allows you to benefit from tax-efficient savings. As such, your stocks could just as easily go down as they could up, meaning that although you’ll save on your tax obligations, your investment might end up leaving you with less money.

Nevertheless, if you do want to take the extra risk on, you have the choice of investing on a solo basis via the Nationwide Aegon Customer Dashboard, and subsequently choosing the shares yourself. Alternatively, if you have savings of £50,000 or more, then you can utilize the expertise of a Nationwide financial advisor.

Key Points:

✔️ Higher risk – investments can go and down

✔️ Great if you want to make more than Cash ISAs pay

✔️ Benefit from tax-efficient savings on your investment gains

✔️ Choose your own investments via the Nationwide dashboard

✔️ Benefit from a financial advisor if you have more than £50,000 to invest

Is a Nationwide ISA safe?

As a UK building society that falls under the remit of the Financial Services Compensation Scheme (FSCS), your savings are protected by the UK government in the event that the institution ceased to exist. As the FSCS protects savers up to the first £85,000 per institution, you should not invest more than this with Nationwide.

However, the above protections won’t apply if you end up losing money via a Nationwide Stocks and Shares ISA. As the value of your chosen investments can go up and down, this is the risk that you take. As such, if you are looking for a truly risk-free investment channel, then you might be best off sticking with a simple Cash ISA.

How much can I invest into my Nationwide ISA per year?

The tax-free limits that you can make each year via your chosen Nationwide ISA fall in-line with that of all other ISAs. For the 2019/20 tax year, the total amount that you can place into an ISA is £20,000. You can split your annual ISA allowance across multiple Nationwide accounts.

screengrab of Nationwide Buiding Society ISA page with man smiling in the background

 

For example, while you might be thinking about putting £20,000 in the Fixed-Rate ISA account, you could just as easily split this 50/50 by putting £10,000 in a Stocks and Shares ISA, with the remaining £10,000 in the Fixed-Rate ISA. However, it is important to remember that before you make a withdrawal mid-year, you need to check whether or not the account is flexible. If it isn’t, and you plan to replace a recent withdrawal, you won’t be able to reset the limit.

FAQs

Do I need to have an account with Nationwide to open an ISA?

This depends on the specific Nationwide ISA you are looking to open. Notably, the 1 Year Triple Access Online ISA - which pays the highest interest rate at 1.21% AER per year, requires you to already have a current account or savings account.

Is a Nationwide Stocks and Shares ISA safe?

It depends on how you define 'safe'. While Nationwide is a hallmark UK building society with a rich history, you need to remember that your Stocks and Shares ISA can go up and down. Ultimately, it depends on what investments you currently have in your portfolio.

How much can I put into a Nationwide ISA?

The limits fall in-line with that of the 2019/20 annual allowance, which stands at £20,000 per year. Take note, there is nothing stopping you from splitting your £20,000 across multiple Nationwide ISAs.

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Kane Pepi

Kane holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of online publications.