Nationwide offers 6% regular savings to its FlexAccount customers – but is that rate as good as it sounds?
Nationwide Building Society has today launched a six per cent Flexclusive Regular Saver, which is available exclusively for FlexAccount customers.
Savers can deposit between £25 and £250 per month into the account and are not penalised if they miss a monthly deposit or need instant access to the money.
However, like many of Nationwide’s top-rate headline-grabbing savings rates, the deal is only open to customers who use its FlexAccount as their main current account or open a new FlexAccount and use its transfer service.
Rainy day saving: But is the 6% regular saver a good deal?
The FlexAccount has no monthly fee, but comes with free European multi-trip insurance and exclusive access to its Select Credit Card.
Richard Marriott, head of savings at Nationwide, said: ‘In the current economic environment it is more important than ever for people to have a savings nest egg.
‘Unlike many other regular savings accounts on the market, Flexclusive Regular Saver does not penalise savers with a reduced rate of interest if they miss a monthly payment or make a withdrawal.
‘New current account customers using the Society’s account transfer service will also become eligible for Flexclusive Regular Saver as well as the other Flexclusives offered with the account.’
What other regular savings accounts are there?
There are other banks that offer regular savings accounts. First Direct – an offshoot of HSBC - for instance, offers eight per cent to current account customers, allowing deposits between £25 and £300 each month.
However, its Regular Saver doesn’t allow missed monthly payments or withdrawals. If you make a withdrawal before the year is up, the account will be closed and you’ll get just 0.5 per cent on all cash in the account.
HSBC offers current account customers a six per cent rate, with a regular saving of £25 and £300. It allows savers to miss a payment but like the First Direct account, you’ll be penalised for withdrawals.
Saffron BS has a four per cent Regular Saver Issue 2 open to all savers. This allows savers to put in between £10 and £200. A real plus point with the account is the fact you can make unlimited withdrawals without penalty.
However, the account can only be opened and operated in branch or by post – it has 12 branches in Cambridgeshire, Essex, Hertfordshire, Suffolk and London.
Norwich & Peterborough BS also offers a four per cent regular saver which can only be opened and accessed online.
It allows savers to put in between £1 and £250 a month and savers can make one penalty free withdrawal each year.
The e-Regular saver is however more strict with payments – if a saver misses one in any given month, you will lose the 1.5 per cent bonus it offers dropping it down to 2.5 per cent.
Although 6% is headline grabbing it’s only good for those saving each month - NOT a lump sum
It’s very easy to get sucked into the rate – but you have to remember you only earn six per cent interest on the balance each month.
Saving £250 a month over the course of the year would mean a saver would have squirreled away £3,000. Sticking this in the Nationwide Regular Saver would garner £83.89 interest (worked out on our monthly or lump sum savings calculator).
But if a saver stuck £3,000 into the top paying one-year fixed account – currently a 3.40 per cent rate offered by Kent Reliance – they would get a £103.60 return, just under £20 extra than Nationwide.
However, a regular savings account for someone putting away £250 or less a month is a sensible option compared to an easy-access savings account, especially the six per cent rate from Nationwide BS, as it flexible in the way it lets you withdraw and miss payments.
Putting away £250 a month in the top paying easy access account – currently the GE Capital Direct GE Bonus Saver Issue 2 and the Derbyshire NetSaver Issue 4 at 3.06 per cent – you would get £42.43 in interest, almost half than the deal on offer from Nationwide.
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