Nationwide building society, which has nearly 20m savings and current accounts, will tomorrow slash some rates to zero

The move came as a host of banks and building societies cut their savings rates by more than this month’s 1.5 percentage point cut in Bank rate, effective from tomorrow.

Interest on Nationwide’s Flex and Cash Card current accounts will fall by up to 1.5 points to as low as zero on some tiers.

Nationwide advertises Flex as paying “up to 30 times more credit interest” than other providers. It now pays just 0%-1.5%.

Many people have taken out the account as it gives access to its e-Savings and Monthly Income 60+ accounts for those aged 60 and over. Rates on those are being cut by 1.5 and 1.55 points to 3.05% and 3% respectively.

Across Nationwide’s savings range, rates will be cut by up to 1.6 points, more than Bank rate — a surprise move for the building society.

“The savings arena is a far less attractive place than it was just weeks ago with many accounts offering paltry and virtually worthless returns,” said Andrew Hagger at price comparison website moneynet.co.uk .

Abbey is also cutting rates by up to 1.6 points. Its lowest standard rate is 0.5% on its Flexible Passbook Saver, a figure that falls to 0.1% if your balance slips below the £500 required to open an account.

NatWest is cutting most rates by 1.5 points, but Tessa funds in its cash Isa will receive 1.6 points less at 2.2%.

Dunfermline building society has cut its Direct Saver by up to 2 points, and the rate on Alliance & Leicester’s Save & Protect for new savers is down to 8% from 12%.

Halifax, meanwhile, is cutting its rates by up to 1.5 points from tomorrow. About 55% of some tiers of its savings accounts will pay less than 1%.

Its lowest rate is 0.1% on its Monthly Saver account, but only if you do not meet conditions for a bonus. It pays as little as 0.25% on its Premium Savings Direct, 60 Day Gold, Liquid Gold, Bonus Gold and Asset Reserve accounts.

Lloyds TBS will cut rates already below 1.5% to 0.1%, while Barclays will also cut rates tomorrow, although a spokesman declined to give details.

Nationwide said: “Having decreased our base mortgage rate by the full 1.5 points, we have to decrease savings rates to ensure we are competitive and sustainable.”