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Btl Alternative: Nationwide Launches New Regular Saver That Pays 5Pc

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Nationwide launches new regular saver that pays 5pc

Nationwide has launched a new regular saver account for banking customers that pays 5pc while allowing more to be paid in each month than rivals and offering greater flexibility to withdraw your money without penalty.

As savers are given more savings options with the new Help to Buy Isa, Nationwide's Flexclusive regular saver pays 5pc interest, fixed for 12 months.

To open Nationwide’s new account, customers must already hold a main current account from the Flex range (FlexAccount*, FlexDirect* orFlexPlus*) with the building society. New customers, or those with other Nationwide accounts that are not their main current account, can get a rate of 2pc.

Nationwide customers can only hold one regular saving account with the provider

Accounts can be opened online or in branch. Customers have unlimited access to their savings and can pay in a maximum of £500 a month, or £6,000 over a year.

Customers who pay the maximum £500 a month into Nationwide's Flexclusive regular saver will earn £162.50 before tax is deducted.

Verdict

In terms of other regular saving accounts on the market, Nationwide’s offer is competitive but not the market leading rate. However, the maximum monthly balance of £500 is more generous than other providers.

It matches the 5pc that TSB Bank offers, although TSB has a limit of £250 that can be paid in each month.

First Direct and M&S Bank’s regular savers accounts both pay a higher 6pc to customers who already hold current accounts.

However, both First Direct and M&S allow smaller minimum monthly payments. The maximum balance a First Direct customer can pay in £300 a month, £3,600 a year, earning around £117 before tax. M&S lets customers pay in £250 a month, £3,000 a year, which would mean an annual return of £97.

Additionally, early withdrawals from both the First Direct and M&S accounts result in loss of interest.

Tom Adams, from SavingsChampion.co.uk says: "Regular savings accounts are a great way for people to build up their savings, be it for a rainy day or for a specific future goal and they currently offer some of the best interest rates on the savings market.

"Some of the top rates available are linked to current accounts, so they are an effective way for providers to encourage people to open a current account with them and hopefully then build a lasting and profitable relationship. The account will not suit everyone, but it is good to see such a prominent provider encouraging savers to get into the savings habit”.

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To open Nationwide’s new account, customers must already hold a main current account from the Flex range (FlexAccount*, FlexDirect* orFlexPlus*) with the building society. New customers, or those with other Nationwide accounts that are not their main current account, can get a rate of 2pc.

Not an option for the masses, then.

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Hmmm. £6k/year adds up. If that £162 is correct for year 1 (that's an APR a little over 5%), then in the second year it's £500, and once you've been saving a few years it could start to add up.

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Not an option for the masses, then.

No, but if it generates some competition for savers' money, then great. The only competition on savings rates for the last three years has been a race to the bottom.

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After april you are not going to pay tax on first £1000 interest earnt . I hope i understood that correctly.

Does this effect this account?

do you pay all interest as account as account was opened before april?

do you pay some until april?

or do you pay none as you get the interest after next december?

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Hmmm. £6k/year adds up. If that £162 is correct for year 1 (that's an APR a little over 5%), then in the second year it's £500, and once you've been saving a few years it could start to add up.

LOL - except this is the typical bait-and-switch banks do - give you high interest for the first year, then move it down to 1% and the majority can't be bothered to switch.

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First Direct have a regular saver which pays 6% but you can only pay in a maximum of £3,600 per year. Not bad if you get one for each family member (eligible).

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After april you are not going to pay tax on first £1000 interest earnt . I hope i understood that correctly.

Does this effect this account?

do you pay all interest as account as account was opened before april?

do you pay some until april?

or do you pay none as you get the interest after next december?

I've seen this discussed on other forums and statements from banks have indicated that interest on fixed term deals which expire after April 5th next year will, for the entire length that the account has been opened, be interest free (up to the £1k limit!)

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Bread & circuses. The only people who make money out of these silly switching incentives are the likes of Martin Lewis.

There is no free lunch.

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Hmmm. £6k/year adds up. If that £162 is correct for year 1 (that's an APR a little over 5%), then in the second year it's £500, and once you've been saving a few years it could start to add up.

Most regular saver accounts close after 1 year and hand you the cash plus interest. I.e. no option to roll it into the next year

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I have a NW current account, because their customer service is less aggravating than my previous supplier (Lloyds). There's usually a bit more spare money sloshing around in an internet-manageable instant access account than I would really like, so I opened one of these new ones and transferred my first month's £500 across yesterday. It took a minute or two. I've set a reminder on my smartphone to check the account status and in all probability close it a year from now. It just means the money gets a bit more interest before I dump it into next year's ISA.

Nationwide are pretty pathetic with the whole limited-issue / real-'em-in-then-quietly-obsolete behaviour but then so are most of the competition. At least it's quick and easy to be a rate tart these days.

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5% Regular Saver max £500 a month earns £162.50 on the £5k invested over the year = 2.7% overall.

That's not how it works as you are not depositing the full £6,000 in the first month. You are limited to making a maximum £500 contribution to the account each month but interest is paid at 5% on an account balance that eventually adds up to £6,000 in the last month at which stage the interest rate will revert to a very low level.

Edited by The White Horse

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That's not how it works as you are not depositing the full £6,000 in the first month. You are limited to making a maximum £500 contribution to the account each month but interest is paid at 5% on an account balance that eventually adds up to £6,000 in the last month at which stage the interest rate will revert to a very low level.

I thought you got 5% on your first £500 because that was invested for the full 12 months. Then 11/12 of 5% on the second month's £500... down to 1/12 of 5% on the final £500. So £162.50 for £6k invested over a year = 2.7%.

(I typoed £5k instead of £6k earlier on)

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