The fall of the UK banks – is the Nationwide any different?

“Savings experts say the flood of money into Nationwide’s coffers is explained by two things: the very competitive rate of 6.15 per cent it is paying on it’s one, two and three year Isa bonds and a flight to safety by savers worried by the problems at Northern Rock and other banks”

Actually, the flow of savings into Nationwide is explained by the fact that it is paying a very high rate for its savings products. Just over a year ago that top 10 payers list was dominated by Northern Rock, Bradford & Bingley and Alliance & Leicester all of which are now having severe financial trouble.

 All of them were paying high rates because they needed to attract money and you need to ask yourself: is the Nationwide any different? Well, it is because those other organisations had shareholders who could bail them out if things didn’t get too bad. Nationwide doesn’t have that advantage. Not only that, but as the largest building society in the country, there is no other society that would be capable of bailing it out by way of a merger of some kind either.With the financial situation as risky as it is now is not the time to be chasing high interest rates: it’s a time to head for safety and that means basically National Savings.

Yes they pay less…but they cannot go bankrupt either.

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