Second initiative from the mutual to push people towards saving more.
Nationwide Building Society has launched a new prize draw scheme, offering ISA savers the chance to win thousands of pounds.
There will be 10 chances to win the top prize of £20,000, the equivalent of the maximum you can save into an ISA in any tax year.
After that, there are a further 10 prizes of £10,000 and 40 prizes of £5,000.
That’s a substantial amount of cash up for grabs, so what do you have to do to be eligible? And what are your chances of winning?
How the Nationwide prize draw works
Entries into the prize draw open on Friday 6th March, closing on Thursday 30th April.
To qualify, you simply need to increase the balance in your Nationwide ISA by at least £100 by the end of April.
So if you already have a Nationwide ISA you can simply top it up, while if you’re a new saver you need to put at least £100 aside.
Your odds of winning will obviously vary, based on how many Nationwide ISA savers increase their balance, and how many new customers open accounts.
The mutual confirmed that it currently has around four million ISA savers who could potentially enter the draw, but it’s anyone’s guess just how many will actually be eligible for the draw itself.
Prizes will be paid directly into your Nationwide account, or by cheque, and it’s only open to savers in England, Scotland and Wales.
Compare savings accounts, Cash ISAs and peer-to-peer investments (capital at risk)
Hunting for a decent rate
Alongside announcing the draw, Nationwide has also beefed up the rate of interest offered on its Triple Access Online ISA, from 0.9% to 1.21%.
Now, if we’re honest, that’s not a rate that’s going to get anyone’s heart racing, but the days of an ‘ISA season’ where providers launched juicy deals in order to tempt savers into opening accounts into the run-up to the end of the tax year are long behind us.
According to financial data site Moneyfacts, the top-paying instant access ISA on the market currently comes from Al Rayan Bank which offers an expected rate of 1.36% (as it’s a Sharia account it doesn’t pay interest in the traditional way), followed by 1.31% from Virgin Money.
On that basis, the Nationwide offering isn’t too shabby.
You should never open an account simply because you hope to win a prize in the process, but with Nationwide’s interest rate at least competitive, it makes the idea of taking out an ISA with the building society more compelling as a prospect.
Giving savers something extra
It’s notable that this is the second prize draw for savers launched by Nationwide in the last month.
In February, it launched a Start to Save scheme, encouraging people with no savings at all to open a regular saver account for the chance to win £100.
While a laudable aim, I wasn’t entirely convinced that such a modest prize would actually succeed in pushing people to put money aside. After all, you could win more than that playing a free lottery.
It’s all the more surprising given the mammoth size of the prizes on offer from this new ISA draw, though Nationwide has claimed that already around 20,000 Start to Save accounts have been opened.
You’d have to imagine that the bumper prizes on offer from the ISA draw will prove even more alluring to those looking to make the most of their remaining ISA allowance for the year.
You’re a winner!
It’s also another reminder of how effective offering savers the chance of a cash prize can be in getting them into the habit of actually saving some money each month.
The enduring popularity of Premium Bonds is not solely because the money is entirely protected by the Government.
The fact that owning a bond offers you the chance to win a prize each month, potentially of up to £1 million, is also a significant draw.
Halifax has also run a prize draw for savers for some time, with prizes of as much as £100,000.
While the account itself should always be the main consideration when determining where to keep your savings, the current low-interest environment means that many are much of a muchness.
So finding something extra ‒ even if it is fairly long odds of a decent cash prize ‒ will make an account more attractive.
Don’t be surprised if others now follow suit.