Nationwide explains when 2.45% interest rate drop will affect savers

Nationwide Building Society has spoken out to clarify the rules around one of its accounts which can be subject to an interest rate cut. A person reached out over social media to ask a question about the mutual's Triple Access Saver. The one-year account pays 3.5 percent interest but this falls to 1.05 percent if you make four or more withdrawals.

The person asked: "If you make a 4th withdrawal from a Triple Access Saver resulting in a drop in interest rate, is that drop from today onwards or valid for the full term (retrospective)?" Nationwide responded to explain: "The interest drop would be from when you made the withdrawal until the account anniversary."

Interest is calculated daily and paid into your account on the anniversary of when you opened the account. Should you chose to close your account early, the interest you have earned will be paid into another Nationwide current or savings account in your name, or into a current account with another UK provider in your name.

Nationwide is currently offering a £175 switch offer, when you switch from a non-Nationwide bank account to a new or existing FlexDirect, FlexAccount or FlexPlus account. You must move over two direct debits as part of the switch.

You need to carry out a full switch using the Current Account Switch Service, including closing your old account. You must complete the switch within 28 days.

Another rule is you need to pay in at least £1,000 and make one debit card payment within 31 days of opening your account, or of applying to switch into an existing account.

Savers may also want to keep an eye on the base interest rate. Many providers cut their rates when the base rate falls. The rate was reduced from 4.25 percent to 4 percent in August.

The rate was also cut in February and in May this year. Some market experts are predicting the base rate could be cut again this year.