Top paying interest, ethics and a decent switching bonus make the account worth considering again.
For years I recommended my readers check out Nationwide’s FlexDirect account. But as other banks got better (Starling, Chase etc) this became harder to justify. Then the perks that made the account hard to beat disappeared. It became one to avoid.
But now the account is once again offering the highest interest rates (for some) and you can nab a decent switching bonus. It also ranks well as an ethical bank and scores highly for customer service.
So are these extras enough to make it your main account? Here’s what you get with the FlexDirect, and whether you should open up an account.
What is the Nationwide FlexDirect account?
The FlexDirect account is a current account from the Nationwide Building Society. It’s free to open and use, though you do have to pay in at least £1,000 a month to get the interest.
You cannot get the account if you already have four or more Nationwide current accounts.
There’s a network of branches you can access across the UK, and there’s also a phone support line.
FlexDirect interest & savings
In account interest of 5%
Nationwide’s FlexDirect account is one of the few current accounts that pay interest on balances held in the main account. And it’s usually a much better rate than you’ll get in normal easy-access accounts.
For the last few years, that rate has been 2% (down from 5%). Though better than what was available elsewhere, I didn’t think it was worth getting due to one key restriction – you could only get the rate once.
My thinking was it’s better to wait in the eventuality the bank increases the interest rate – and finally it’s happened. As of June 2022, you can get 5% interest on savings again! This is currently unbeatable.
But it has its limits. You only earn money on the first £1,500. Above this you get 0%. This means if you have the full amount possible in the account for 12 months you’ll make £75.
Unlike every other easy-access account, the rate is fixed. That means you will get 5% for the entire year – it can’t be cut once you’ve opened the account (but only for that first year of course).
That is much better than the £30 you’d get when the rate was 2%, but it’s a big drop from the £125 you could earn before the change. That’s because the last time 5% was offered, it was available on balances up to £2,500.
Still, I’d say this is now a decent account to opt for if you want the highest possible return on your savings.
However since, the rate also only lasts for one year (after that it drops to 0.25%), you will want to move your money in 12 months.
You have to pay in £1,000 every month to qualify for the interest. This can’t be from another Nationwide account.
And you can boost your earnings if you’re in a couple. You can each have an account, and then open up a joint account too, meaning you’ll earn the 5% on £4,500.
As mentioned, there is a very important rule that could be an issue – this rate is for first-time account holders only. So if you’ve had the account before, you won’t get the new rate, even if you open up a new account.
Regular savers – 2.5%
There’s also a 2.5% paying regular saver only for Flex current account customers. This can be beaten by a handful of other providers, but isn’t a bad bet.
There’s also a Start to Save account, paying the same rate, that also gives you the chance to win £250 every six months. You don’t need to have the current account for this one though.
FlexDirect 0% overdraft
Unlike the other banks, the Nationwide FlexDirect account comes with a 0% overdraft for the first 12 months. This can be a massive bonus for anyone regularly overdrawn.
Let’s say you’re £500 overdrawn for three weeks out of every four. Moving that to a 0% overdraft will save you £150 a year in interest!
Sadly, like the interest, it is also just for those 12 months, so really it’s best to use that year to pay off the overdraft so you start the second year with a positive balance – and stay there.
You can get an overdraft up to £2,750 with this account. You can find out how much you’ll get through an eligibility check on the Nationwide website. This runs what is known as a “soft check” on your credit report, so if you decide not to go ahead it won’t impact your score.
However, if you’ve already had the account or keep it past year one, you’ll get charged a heft amount As with all the other banks, Nationwide increased the overdraft interest rate as part of the new rules introduced a few years ago. So if you go overdrawn you’ll pay a huge 39.9%.
Nationwide switching bonus
I’ve written about Nationwide’s bank switching deal in detail in a separate guide, but here are the essential need-to-knows:
Nationwide has an ongoing incentive for bank switchers with no set end date, but that could mean it goes any time.
There’s £125 available to existing Nationwide members (this can be from a savings account, mortgage or current account) or £100 for complete newbies.
You can only claim the cash once on a personal account, but unlike other banks, you can get an extra bonus if you switch a joint account (there’s just one payment for both of you on this).
It’s open to new and existing customers, so if you open or upgrade to a FlexDirect account you’ll be eligible.
This offer replaced the refer-a-friend offer than ran until March 2020, though if you got that cash you will still be eligble for this deal.
So far so good. Now the bad. I hate the app. This is one of the main reasons I moved my main banking from Nationwide to Starling.
My big frustration is that you need a card reader to set up a new payee. This might add an extra layer of security, but it’s not something most of the other banks I use require.
Otherwise the app is fine, but doesn’t have any of the extras you’d get with the challenger banks, or even the likes of Halifax, Lloyds and Barclays which have made big improvements in recent years.
You can activate a couple of features to help you save. One, Impulse Saver lets you add money to your savings account from the homescreen of the app.
The other is a round-up feature, as you see with many other banks. If you turn this on a small amount of money will be transferred each time you spend. So say you spend £1.20 on your debit card, 80p will go to savings.
Something I’ve been thinking about more over the last few years has been how the money I keep in a bank is being used. It’s not sitting in a vault, it’s being invested and loaned by the bank. And that could mean it’s used for things I really don’t agree with – from supporting arms manufacturers through to funding new oil pipelines.
If this bothers you too then Nationwide is regarded as one of the best options. A big part of this is that it’s a building society rather than a bank, which means it has to use 75% of its holdings to lend to home buyers.
That prevents it lending large amounts to unethical sources – but it also has a positive investment policies. For example your money will not be invested in fossil fuels.
Nationwide is also a mutual – meaning it’s owned by and run for the benefits of its customers (or members) rather than shareholders.
Ethical Consumer rates Nationwide ahead of all the other major banks, so it’s a good bet if you want to put your money somewhere other than low-scoring banks such as HSBC, Natwest, Barclays, Lloyds, Santander and co.
And while the top-rated current account for ethics is from Triodos, that comes with a £3 monthly fee and a more limited app, so Nationwide represent a good alternative.
Should you open a Nationwide FlexDirect account?
Anyone who has a hefty and regular overdraft should check this account out ASAP. That year at 0% could save you a ton of cash.
For savers who’ve never had the account then it’s worth it to get the interest (though with the caveat that if we see more and more interest rate increases from the Bank of England, there could be similar rates elsewhere or perhaps an even better rate from Nationwide in the future).
And the switching offer is a fantastic extra too, especially if you’re a couple who can also switch a joint account.
Plus, vitally in my opinion, it’s also a great account to go for if you’re concerned about how your money will be invested.
However, in terms of using the app and online banking – essential for making it your main current account – I’d personally look at someone like Starling, Chase or Monzo bank.
It could be that you use Nationwide just for your savings/overdraft in year one, but do your spending from a different account. That way you’d only need to set up this second account as a payee and not worry about finding the card reader each time you want to send money.
Then once you’re in year two you might want to think about switching it to a different bank if the app hasn’t massively improved.
Nationwide Flex Direct summary
|0% overdraft for the first 12 months
|5% AER (fixed) interest on the first £1,500 saved for 12 months (drop to 0.25% after a year)
|Access to 2.5% AER (variable) Flex regular saver (max £200 a month)
|Pay in £1,000 a month
|Two – one personal and one joint
|Transfers in from other Nationwide accounts don’t count towards the £1,000
Check out my massive list of the other incentives and features offered by all the banks here. This includes the best free cash bonuses for changing bank.
Elsewhere my favourites are:
- For day-to-day spending and banking look at Chase and Starling
- For cashback on bills check out the Santander 123 lite
Rather watch than read (or do both?) Here’s my video review on YouTube from 2020