Nationwide launches 5.30% savings account

For a member who can leave the money untouched until the end, this is a solid offer, but the tax deserves as much attention as the rate. Banks should reward loyalty more, because people who've stayed put deserve at least a newcomer's deal. Keeping Nationwide's best fixed rate for existing members does that, even though anyone joining now is too late to qualify. On the plus side, the rate is fixed for the whole term. Against that, the money is normally locked in after a short window to cancel, and the interest is paid without tax taken off, so any bill is the saver's. The con that's easy to miss is timing, because HMRC's own guidance says interest on a bond you can't touch until it ends is taxed when it ends. So all the interest could count as income in the tax year the bond ends. Each year's interest on its own would fit inside the £1,000 tax-free allowance a basic-rate taxpayer currently gets, but the total on a maximum deposit doesn't, so part of it could be taxed.

A headline grabber for sure, but cash is still cash at the end of the day. Factor in inflation now and in the future, and the real returns may be eroded. After setting aside an emergency fund, segment your money by time and need, then consider your options based on the risk you are willing to take.