Once again it’s the highest paying current account for savings.
Those who open a new Nationwide FlexDirect current account will be able to earn a table-topping 5% interest on savings – as long as they’ve not had the account before. Here’s what you need to know.
How to get 5% interest on your savings
This rate is only on offer in Nationwide’s FlexDirect current account (here’s my review). You don’t need to open up any additional accounts as you’ll earn the interest on the balance held in the current account itself.
However, there are three key restrictions:
- First, it’s only offered on the first £1,500 saved in the account
- Next, this rate is only for one year, after which it drops to 0.25%
- And finally, you can’t get it if you’ve previously had a FlexDirect account
So if you’re new to the building society and put in the full amount at account opening, it’s worth £75 in interest after a year.
This is lower than the last time the building society offered 5% as back then it was on balances of up to £2,500. Still, it’s better than you’ll find elsewhere.
You can get the rate on both one personal account and one joint account, though the same rules apply.
There’s also a switching bonus worth up to £125, more on this below.
Should you get the account?
I’ve been warning against opening this account ever since the rate dropped to 2%. That was in the hope that we’d see an increase just like this.
The rate makes the account my new top pick for savers not just on the rate but also on ethical – though only for 12 months. So I’d absolutely open up the account and put as much in as possible.
But timing is important. Remember, if you open it now and don’t have the savings, you won’t be able to get the rate again at a later date.
So it could be wise to hold off, and leave it for a time when you will have £1,500 that can sit in the account for a full year.
What if you already have the account?
For years the Nationwide FlexDirect ruled the roost when it came to savings, offering 5% on a limited amount of cash. This made it my top pick, so I’m sure many of you already took advantage. You might even have opened it after it dropped to 2%.
As mentioned, you can’t get the rate again if you have already had a FlexDirect account in the past or had one for more than a year.
And sadly this is also the case if you’re currently in the first 12 months of the account. You’ll keep getting 2% interest on your savings, and it won’t be bumped up to 5% for any remaining months of that first year.
Alternative savings accounts
If it is the case you won’t get 5% interest rate, whether you open a new account or through an existing one, or you’ve got more than £1,500 to save, you’ll want to look elsewhere.
It could be that this move from Nationwide triggers other banks to offer similar deals, and there are likely more base rate increases on the way too.
But for now, your next best bets are two accounts offering 2% and a handful of regular savers offering between 2.5% and 3.5%. You can get more details about these in my top savings account guide.
High-paying current accounts & apps
|Nationwide FlexDirect Current Account||5% AER fixed on up to £1,500 for 12 months|
|Virgin Money M Plus Current Account||2.02% AER variable on up to £1,000|
|Claro (iOS app)||2% AER variable on up to £3,000|
High-paying regular savers
|First Direct Regular Saver*||3.5% AER fixed for 12 months (Max £300 a month)|
|Natwest Digital Regular Saver*||3.3% AER variable on up to £1,000 (Max £150 a month)|
|RBS Digital Regular Saver*||3.3% AER variable on up to £1,000 (Max £150 a month)|
|Nationwide Flex Regular Saver*||2.5% AER variable for 12 months (Max £200 a month)|
|Nationwide Start to Save||2.5% AER variable for 24 months (Max £50 a month)|
|Santander 123 e-Regular Saver*||2.5% AER fixed for 12 months (Max £200 a month)|
How to get another £125 for opening the account
Nationwide is currently offering a switching bonus of up to £125. First, you’ll need to apply for any Flex current account from the building society, either online or in person. There will be a hard credit check on your application.
Once you’ve done this, make sure you then switch over a current account from a different bank. You can do this during or after the application. Here’s my full analysis and all the eligibility rules.
If you’re brand new to Nationwide, you’ll get £100 as part of the switch (which closes your old account completely). But if you’re an existing member, you’ll get £125.
It’s easy to cheat this and become a member first by opening up a separate savings account, and then opening the current account. The recent Start to Save regular saver is a decent option.