Nationwide current account pays market-leading 5% interest
You can now get 5% interest on current account balances up to £2,500 with Nationwide's FlexDirect account.
Nationwide now has the market-leading current account as it increases the amount of interest it pays to 5%, from 2%.
It will pay this amount on balances up to £2,500 for 12 months at which point the interest rate will revert back to 1%.
This is a brilliant offer as it beats any other current account offers and any one-year savings rates.
The deal
New and existing customers can now get 5% interest on balances up to £2,500 in their Nationwide FlexDirect account.
There will also be no overdraft charges for the first 12 months, after which point a hefty fee of 50p a day will be applied on arranged overdrafts of more than £10.
To open a FlexDirect current account customers need to deposit at least £1,000 per month and this can be done online or in a branch.
How does it compare?
Several other current account providers offer interest on in-credit balances. The closest contender to the Nationwide deal comes from Halifax at £5 per month, or £60 a year.
|
Provider |
Account |
Interest (APR) |
Fee |
Interest earned on £2,500 |
|
Nationwide BS |
FlexDirect Current Account |
5% for 12 months |
N/A |
£100 |
|
Halifax |
Reward Current Account |
£5 per month |
N/A |
£60 |
|
Santander |
Up to 3% |
£24 a year |
£40 |
|
|
Lloyds TSB |
Classic Current Account with Vantage |
Up to 3% |
N/A |
£40 |
What’s the catch?
As the 5% interest rate only lasts for 12 months, you’ll need to be happy switching your account at this point in order to continue getting a decent interest rate.
It’s also possible to put more money into some of the other current accounts, such as the Santander 123 account. With this account you’ll earn 3% on balances between £3,000 and £20,000 so although the rate isn’t as high, you can earn interest on a far greater sum of money.
Is it any good?
With a dismal savings market where rates are averaging around the 2% mark, this increase from Nationwide is welcomed.
The deal beats any other in the current account market and it is also way ahead of any one-year fixed-rate savings bonds.
Therefore it’s an impressive deal for those people willing to switch accounts after 12 months.
More on current accounts and savings:
Get cashback with your current account
The best and worst packaged current accounts
The top fixed-rate savings bonds
Agribank: New bank will pay 3.6% on your savings
New 18-month Marie Curie savings bond paying 2% launched
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Comments
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Because you need to put in £1,000 per month, you need to pay that out every month, so that would drop your interest or you would have some not earning anything. That plus the 12 month limit does not make it worth the effort. Mike
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Its not a isa so after 20% tax = £100 simples
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I don't understand how an account that pays 5% only pays £100 on £2500. Surely, that should be £125?
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12 March 2013