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.