Nationwide Flexaccount Gotcha !

Red_Ant

Apologies if this has been posted before.

I've only just discovered that Nationwide have made yet another change to their interest rate structures - and now pay a pitiful 0.1% rate to investments over £3,000 in their Flexaccount.

Clearly they want to encourage people to move the money to other accounts, but I'd guess some people will have a balance greater than this after their salary is paid in, especially if they keep a big float for direct debits - especially as Nationwide now require £1,500 paid in from a non-Nationwide account each month to earn the highest interest on this account.

What doesn't help is their interest rate information on their website is easily misread (as I did), as this information is at the bottom of a page, not next to the specific information on the Flexaccount. :mad:

amcluesent

>but I'd guess some people will have a balance greater than this after their salary is paid in, especially if they keep a big float for direct debits<

Sure. I get paid on last working day of the month, have all my DDs set to be processed by day 4. Then move the balance to eSaver, leaving a few ££ hundred for withdrawal during the month,

apt

They've had a low rate above £3,000 for a long time and that's reasonable in my view. Current acounts are not for keeping large balances. It's now going to be zero rather than 0.1% for balances above £3,000. As the highest interest rate is now only 1.5% and still no sign of faster payments the only real strength of the Flexaccount is its lack of charges on foreign currency spending.

evenasus

I'm not too happy with their other rates either but I suppose others are dropping their rates too.:(

Savings http://www.nationwide.co.uk/mediacentre/pdf/savingrates-28112008.pdf

Bonds http://www.nationwide.co.uk/mediacentre/pdf/bondrates-28112008.pdf

Joe_Bloggs

@Red Ant
Your employer may be flexible enough to split your salary payments to different accounts. I am with amcluesent in that I keep the minimum amount necessary to do the task in the Flexaccount. This is backed up by a never used overdraft facility.

@All
Some 'forward thinking' banks allow a balance sweep facility in which the balance in the current account is maintained by a savings account so that the current account is never below a certain level of credit. Is there any obstacle that prevents the Nationwide from providing this facility ?

J_B.

Milarky

Joe_Bloggs wrote: »

Some 'forward thinking' banks allow a balance sweep facility in which the balance in the current account is maintained by a savings account so that the current account is never below a certain level of credit. Is there any obstacle that prevents the Nationwide from providing this facility ?

It's clear the NW are poor innovators in the current climate. Flexaccount was a 'first' when launched 20 years ago - the first current account to pay interest. The first bank to offer a debit card in 1991 (although they never actually got round to 'offering' me one - I had to apply for it after having had an account for 8 years) One of the first to offer online banking and before that telephone banking. But it's all gone to rot because they stopped making helpful changes after the initial novelty. While they still score highly for their website IMO, they've dropped secure messaging effectively (must allow up to 5 days to respond) so that when something out of the ordinary does occur there is no obvious way to get it addressed.

e-savings account is well past its sell-by date (i.e. no changes made since 2000 and all it is is a 'transactional account' I believe - always going through the Flex )

bristolleedsfan

Joe_Bloggs wrote: »

@All
Some 'forward thinking' banks allow a balance sweep facility in which the balance in the current account is maintained by a savings account so that the current account is never below a certain level of credit. Is there any obstacle that prevents the Nationwide from providing this facility ?

J_B.

Just suits Nationwide for as many people as possible to keep as many pounds as possible sitting in its Flexi-account earning no or little interest :mad: , whilst many on here will keep the minimum possible in Flexi-Account many on the outside world do keep significant funds in Flexi-account for a number of reasons.

rb10

The money in current accounts is more readily accessible than that in other accounts, so it's a bad idea to keep too much in there - as if fraud did occur, there's more money for the fraudsters to take. So it's very sensible for banks to deter customers from having too much money in their current accounts. So to do this they pay little/no interest on large balances.

LittleVoice

Milarky wrote: »

It's clear the NW are poor innovators in the current climate. Flexaccount was a 'first' when launched 20 years ago - the first current account to pay interest.

Though it was at a very low level, I think Williams & Glyn's (later incorporated in RBS) offered an interest-paying current account more than 30 years ago.

fullstop

LittleVoice wrote: »

Though it was at a very low level, I think Williams & Glyn's (later incorporated in RBS) offered an interest-paying current account more than 30 years ago.

RBS still do, only pays 0.1% but get what you can from the banks.

steady__eddie

"Some 'forward thinking' banks allow a balance sweep facility in which the balance in the current account is maintained by a savings account so that the current account is never below a certain level of credit."

Could anyone please give me a few examples of these ?
I ceased having my salary paid into Nationwide at the begining of the year and split it between A + L and Lloyds half way through. I need to start looking around shortly to see where to move to next when these deals finish.