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Nationwide current account pays market-leading 5% interest
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.
