Nationwide has relaunched its Loyalty Saver, offering a better rate of interest the longer you've been a member of the mutual.
Nationwide Building Society has relaunched its Loyalty Saver account, which rewards people who have been members of the mutual for at least a year.
The last time Nationwide launched a Loyalty Saver I wasn’t a fan, as I explained in Why Nationwide's instant access Loyalty Saver account is rubbish.
Is the new version any better?
The last version of the Loyalty Saver was only open to people who had been members for at least five years, so this version is an option for more savers.
The idea of the Loyalty Saver is that the rate of interest you enjoy gets bigger depending on how long you have been a member of Nationwide.
Here’s how the interest rates break down:
|
Length of membership |
AER |
|
One-four years |
1.40% |
|
Five-nine years |
1.50% |
|
10-14 years |
1.60% |
|
15 years plus |
1.70% |
The account offers easy access, and can be opened with a minimum of £1,000.
Here’s how it compares to the best easy access accounts around at the moment.
|
Account |
AER |
Minimum deposit |
Withdrawal restrictions? |
|
ICICI Bank HiSAVE SuperSavings Online Account |
1.75% |
£1 |
- |
|
Yorkshire BS Triple Access Saver |
1.65% |
|
Three penalty-free withdrawals a year |
|
Coventry BS Online Saver |
1.60% |
£1 |
Four penalty-free withdrawals a year |
|
West Brom BS Branch Easy Access Saver |
1.60% |
£1,000 |
Two penalty-free withdrawals a year |
|
Virgin Money Easy Access E-Saver |
1.55% |
£1 |
- |
|
Post Office Online Saver |
1.50% |
£1 |
- |
|
HiSAVE Remittance Account* |
1.50% |
£1 |
- |
*Existing current account holders only
By the standards of the easy access market, the Loyalty Saver isn’t the worst option in the world if you’ve been a member of Nationwide a long time. Last time out, its top rate of interest – a reward for 15 or more years of loyal custom, remember – didn’t even make the top ten.
A year on and anyone with five years of membership will be getting a relatively decent rate, though it can be beaten elsewhere without the expectation of years of being part of the Nationwide family.
[SPOTLIGHT]That said, I find it more than a little strange that I can get a rate of 1.40% from Nationwide today, having never been a member, thanks to the MySave Online Plus. Sure, I only get one free withdrawal a year, but it’s disappointing that five years of membership only seems to earn you a few extra penalty-free withdrawals.
You’re better off with a Nationwide current account!
If you don’t have a huge amount of savings in place, but you want to get a decent rate of interest, you may actually be better off with a current account from Nationwide.
The FlexDirect pays a rate of 5% AER on balances of up to £2,500, so long as you pay in £1,000 each month. It also comes with a 12-month fee-free overdraft.
In fact, it’s not the only current account offering returns that beats even the best savings accounts.
Nationwide pays a rate of 3% on the FlexPlus current account, again on balances up to £2,500. This account comes with a three-month fee-free overdraft and offers commission-free cash withdrawals abroad.
There’s also the Santander 123 current account, which pays 3% on balances between £3,000 and £20,000, 2% on balances above £2,000 and 1% on balances of £1,000 plus.
It also pays cashback on certain direct debits. You earn 3% cashback on mobile, home phone, broadband and TV bills, 2% cashback on utility bills and 1% cashback on water, Council Tax and Santander mortgage bills.
Note that you will have a pay a monthly fee of £2 and fund the account with £500 a month.
Turning your back on banks and building societies
Whether it’s a rate of 1.40% for recent members of Nationwide or 1.70% for 15 years of membership, these aren’t rates of interest that will get anyone too excited.
One alternative to traditional savings that is quickly growing in popularity is peer-to-peer lending. The idea is simple – rather than save your money with a bank, which uses your cash to fund its lending, you lend the cash directly to individuals and businesses yourself. As a result, you tend to get a better rate of interest.
I gave one lender a go with my own cash last year, as I explained in Why I've started saving with RateSetter. The rates have fallen sharply since then, though RateSetter’s monthly access account offers a rate of 2%, a fair bit higher than any easy access accounts.
There is additional risk to take into account; at the moment, peer-to-peer lending is not regulated, so if it all went wrong your cash would not be protected by the Financial Services Compensation Scheme. But that’s due to change next year.
For more on peer-to-peer lending sites, read What is peer-to-peer (P2P) lending?