Natwest £50 savings cashback loophole

MSE_Jenny · 17 June 2008 at 12:19PM

Updated 5 August 2008

What’s the loophole?

Natwest is offering £50 cash if you get one of its savings accounts. While the accounts aren't competitive, add the interest to this incentive and it's unbeatable (provided you only put the minimum needed in) and better still, you don't actually have to KEEP money in there, just PUT IT IN.

So if you've got a little spare cash, this is well worth it.

How does it work?

To be eligible, the terms state you need to set up a standing order to deposit £100 into a savings account every month for a year, but once this money is in and cleared (call it a week for safety), you can withdraw it again.

Even though Natwest pays a lot less interest than the top savings accounts, just put the £100 in and it's worth it.

How to grab the cash

Step one. Sign up for a savings account.

First sign up for a Natwest savings account; the cashback works on all savings accounts, except Isas. The best paying account is the e-Savings (4.3%).

On all the page you should see the £50 offer (usually its the second tab on the page). If you don't see it, then be careful: once this loophole goes to 2.3m people in the weekly e-mail, there's a chance NatWest will pull it.

Step two. Set up a standing order.

Set up a standing order to pay in £100 each month for 12 months (Natwest should set you a standing order through the post to fill in). You must set the standing order up before September 2008, to start no later than 4 October 2008.

Once the savings account's ready to go, it's worth checking the standing order's set up on your current account. If it isn't, your bank will be able to do it; just tell them the sort code and account number. You can set up a standing order from any current account: not just Natwest.

OPTIONAL Step three. Take the cash out

The easy way to manage this is taking the cash out every few months, though if you're an eager beaver you could do it each month. Simply electronically move the money into your current account and the withdraw the cash to a top savings account a few days later. This is within Natwest's terms and conditions.

Though even if you left the money in the account for the entire year, you’d only lose out on just over £13 interest compared with the top current account.

While there's no minimum balance for either account, it's probably best to leave a quid in there, just to be safe.

Step four. Grab the £50

After your 12th consecutive monthly payment, Natwest will deposit £50 into your account, within a month. At that point you could simply take all the cash out and close it down.

Is its savings account any good?

The e-saver pays 4.3% interest if you've more than £1. This is far short of the market leaders, which pays 6.55% (see Best Savings Accounts).

Yet remember you're only depositing the money to get the cashback.

If you just put £100 in the account each month and left if there, then including the cashback you’d still make £30 more than just putting it in the best savings account. Think of it as a savings account paying 12%. However of course by withdrawing the cash and savings it elsewhere at a higher rate, you'd make even more.

And if you move your cash more quickly into the best savings account, you do even better.

Is there any risk to this?

No. You’re simply putting money in a savings account, which as it’s a no-notice account, you can withdraw at any time and close the account whenever you want. Just don't leave the money sitting there for too long.

Thanks to chris_langs below for the cracking spot. This post was inserted so we could give MoneySavers the full lowdown.

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chris_topher97 · 11 July 2008 at 9:09PM

http://www.natwest.com/personal/save-and-invest/savings/g1/instant-access/e-savings.ashx

I saw this on the natwest site, £50 Cashback if you have a minimum £100 standing order for 12months, but with an uncompetitive interest rate of 4.3%

Say you set you standing order to £100, after 12months you'll have £1200, and will have earned about £72 on your money (including the cashback) this works out at 6% interest, after tax. Which isnt too bad.

Even better tho,
"Fast transfers – it's quick and easy to move money between e-Savings and your other NatWest account"

as far as i can see there is no penalty to the £50 cashback for withdrawing your money out of the e-saver during the 12months, so couldnt you set up the standing order of £100 and just transfer the money back out again to a better savings account, and still collect your £50 after 12months?

nilrem_2 · 11 July 2008 at 10:10PM

I have had a NatWest esaver account for quite a long time, the interest is not fantastic but it's a useful account, what I like is the ability to transfer cash to and from their current account instantly.

I have my monthly interest from my other savings accounts (such as Icesave etc) paid into my current account where I have immediate use of it what I don't need I transfer to the esaver account whilst I decide which other high interest account I shall transfer the bulk to.

I recently bought a new car and was able to transfer the cash from esaver to current account a few mins before paying via debit card for the vehicle.

Shake · 14 July 2008 at 8:23PM

This is a stonkingly good little deal. The £50 cashback makes all the difference. If you drip feed £100 every month into the esavings you'll get £22.36 net interest plus £50 cashback after a year. Remember you're not tying up all of £1200 for a whole year, but more like the equivalent of £600 for a year. So this is like a regular saver paying around a 14% interest rate gross (rather than the 6% net you suggest here chris_langs).

You can probably squeeze a slightly better rate of return by transfering funds out of the esavings into a higher rate of return non-Natwest account, during the course of the year. You'll probably just be losing a few days interest during BACS transfers remember though.

msaquib · 14 July 2008 at 10:14PM

Hi,

If I pay 3 months of £100 then withdraw it and continue todo so in same way - will I still get £50 end of the 12 months period?

Thanks
MS

brookerbabyisababy · 14 July 2008 at 10:45PM

Do you need a Natwest Current account to be eligible for this offer?

rail.link · 14 July 2008 at 11:56PM

Is it only for existing customers ?

If not, can you drip-feed from an external account ?

Milarky · 15 July 2008 at 10:54AM

msaquib wrote: »

Hi,

If I pay 3 months of £100 then withdraw it and continue todo so in same way - will I still get £50 end of the 12 months period?

Thanks
MS

As far as I can see there is no condition preventing withdrawals. Thus you only have to pay in £1200 over 12 months and each month (I'm assuming) may withdraw to the minimum operating balance (£0.00?) This looks like a very easy (and profitable) £50...

Will await more comments...

Milarky · 15 July 2008 at 11:01AM

rail.link wrote: »

Is it only for existing customers ?

No - as is clear from this:

Why choose an e-Savings account? £50 cashback - if you set up a new monthly standing order of £100 or more for at least a year (conditions apply).

They would not recommend opening an account if this was ineligible for the deal

I just spoke to NatWest about this and it appears that the way you go about qualifying (if you have an online operated account at least) is to login and then create a standing order mandate from there. That would make sense since any old payment into the account for £100 means nothing to 'the system' but where a record exists they can credit you for it. Also changes to the mandate could be maintained from the online area. Obviously you can apply for a new account and set up a standing order thereafter in a similar fashion

Kavanne · 15 July 2008 at 11:18AM

As far as I am aware you only have to maintain the SO for 12 months to get the cashback, but you can make normal withdrawals from the account

Make of that what you will!

rail.link · 15 July 2008 at 1:39PM

So, if I opened an esaver and made manual monthly transfers from my external current account, this would qualify ?

Or, the SO mandate is created on the esaver and draws money in, automatically, from your external account ?

Natwest £50 savings cashback loophole

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