Nationwide Boosts The Banking War With Its 5 Per cent Interest Rate
As one major current account operator in the UK gives 5 per cent interest on balances up to £1,500 for the first 12 months, the competition for clients heats up.
Here’s all you need to know:
Before this, Nationwide Building Society gave 2 per cent fixed for 12 months on balances up to £1,500 on its FlexDirect account. However, the rate is now more than twice that at 5 percent AER (annual equivalent rate).
What is Nationwide Building Society?
Nationwide Building Society provides personal financial services. Moreover, it offers the provision of residential mortgage loans, savings, and general insurance. In short, personal banking products and financial planning comprise its major portfolios for retail business. Additionally, it provides small and medium-sized businesses with specialized loans. Other services include limited secured commercial lending, and commercial offshore deposit-taking (SMEs).
What are the benefits and conditions?
One can avail of the introductory rate of 5% on new applications submitted starting on June 21. Besides, the account pays 0.25 per cent AER after a year.
The introductory credit interest rate and interest-free overdraft offer are available to members only. Therefore, anyone who has previously held a FlexDirect account is not qualified for the current rate.
However, applicants would be qualified for the introductory rate on a joint account. And they’d be able to do so if they had previously held a solitary account solely, and vice versa.
Finally, without taking into account transfers from other Nationwide accounts or Visa credits, members will have to pay £1,000 each month.
Provisions for account switching
Those who want to switch accounts, they’ll also be able to gain benefits from the Society’s switching incentive. It pays £125 to current members who switch their current accounts to the Society. Besides, it pays £100 to new customers.
In order to be eligible, one must make the switch from another provider using The Current Account Switch Service (Cass). Moreover, at least two active direct debits must be sent over to the new account as part of the switch.
Nationwide Building Society’s statement
Debbie Crosbie, chief executive of Nationwide Building Society, “this market-leading rate will help new and existing members make the most of their money. And according to him, that is particularly vital right now.”
The FlexDirect current account also offers an introductory interest-free overdraft. This is to help those who are having financial difficulties get some peace of mind. Moreover, it intends to free them up to concentrate on paying off other debts.
According to Nationwide, if customers have at least £1,500 in their account over the course of the next 12 months, they could benefit from a £200 boost over the course of a year. And it’ll be possible by combining the £125 switching incentive with the £75 interest that they might otherwise receive from the 5 percent interest rate.
Additionally, FlexDirect allows eligible candidates to switch their overdrafts from their current account provider. Or they’ll be able to switch accounts from another Nationwide account for the first 12 months interest-free.
Besides, the amount of an overdraft that is initially offered to a person will depend on their unique situation. After the first 12 months, the overdraft interest rate is 39.9 percent.
What are the different opinions?
According to Rachel Springall, a spokesman for Moneyfacts.co.uk, “it’s great to see Nationwide provide a market-leading interest rate on a current account. This can entice customers when combined with the switching cash incentive.
It will be intriguing to see if any of its rivals reconsider their interest rate offerings on current accounts in the upcoming weeks”, she continued.
Some providers, like Santander, have begun changing their current account interest rates.
Customers could earn up to £60 per year with Halifax’s incentive current account. This will give out a £5 reward each month.
Moreover, customers evaluating up-front moving cash will discover more generous free cash offers elsewhere. For example, HSBC (£170) and first direct (£150).
However, they must consider both perks and expenses when comparing current accounts. It’ll help them to be sure that the product meets their banking needs.
