Nationwide FlexDirect - 5% interest, free overdraft

[Deleted User]

Thanks for the advice folks. I have gone ahead and applied to open the account. Not sure if it worked as when I clicked 'finish' the page then just closed itself and there has been no email to confirm. Will have to wait and see if the paperwork arrives within 5 days as stated.

I do hope I can open it to boost my interest earnings - I currently have around £4k saved in a savings account paying only 0.4%! If successful I think I will try and get OH to open one too so we can maximise the amount we can put in.

financialbliss

typistretired wrote: »

It is quicker to open a new flexdirect account rather than upgrade your flex account.

At the moment I am receiving interest on all mine and my husband's flexdirect accounts but don't know how long they will allow as their conditions state interest paid on only one.

Good to know. Thanks.

Anyone know of timescales of upgrading vs applying for a new account?

We have a regular saver maturing at the very end of the month and will be looking for a home for the cash.

Will try upgrading/opening a second and move forwards from there. I'll be getting Mrs Bliss to open the accounts first - she's a non tax payer, so no tax deducted. We are starting from a savings pot of zero, if you disregard the regular saver, so won't be opening all four at once anyway.

Thanks,
FB.

typistretired

Logged into your account you could apply to upgrade your flex account to a flexdirect account and then make an application for a new flexdirect account straight after. You are allowed 4 flexdirects. Then let everyone on here know how long each took to open. It is a few months since I upgraded my flexaccount but I know I had to wait over a week, whereas the new account was open within 48 hours. But they seem to be taking longer to open now so let us know how you get on with your applications.

malc_b

typistretired wrote: »

You are allowed 4 flexdirects.

But what is the point when NW FAQ says

"You can open up to four Nationwide current accounts, however you are only guaranteed the 5% AER promotional interest rate on one FlexDirect account."

Seems like a risk since you don't know if NW will pay or when they will stop. Even if you check each month you could still lose a month's interest. However, I guess 11/12th of 5% is still a good rate.

But a safer better is to go for a TSB and/or Lloyds which gives 3% which no need for DDs.

ColdIron

malc_b wrote: »

But a safer better is to go for a TSB and/or Lloyds which gives 3% which no need for DDs.

There is no need for DDs with the Nationwide FlexDirect

malc_b

ColdIron wrote: »

There is no need for DDs with the Nationwide FlexDirect

Yes, I know that. I meant like the Santander 123 which does need DDs AFAIR (and you need to use the DD to get cashback to offset the £2 pm fee anyway).

To sum up, if you have a lot of money looking for the best interest rate then the options are NW flexdirect (£2.5K 5%, £1000 pm), TSB, Lloyds (£5K, 3%, £1000 pm), Santander (£20k, 3%, £500 (AFAIR) pm, £2 pm fee, DDs but gives cashback which offsets £2 pm).

update: Clydesdale, Yorkshire bank (£3k, 4%, £1000 pm)

Any others?

malc_b

BTW does anyone else think it is a daft state of affairs to have to go to such lengths to get a decent interest rate? The only useful thing about all the banks forcing us to have interest current accounts is at least then you have lots of bank accounts to set up the £1000 transfer pm they all require. The same £1000 goes around, which with FP is no loss of interest. Not sure how it helps the banks having the money go up and down and them having to move it, rather than it just staying in the account so they can use.

ColdIron

malc_b wrote: »

BTW does anyone else think it is a daft state of affairs to have to go to such lengths to get a decent interest rate?

The banks didn't engineer this situation, you can thank the Funding for Lending Scheme for that. Several of these current accounts existed before FLS started last August. Although banks no longer want our savings, well not at rates higher than they can get from the BoE, they are still competing in the current account space and need to offer incentives

Milarky

malc_b wrote: »

BTW does anyone else think it is a daft state of affairs to have to go to such lengths to get a decent interest rate? The only useful thing about all the banks forcing us to have interest current accounts is at least then you have lots of bank accounts to set up the £1000 transfer pm they all require. The same £1000 goes around, which with FP is no loss of interest. Not sure how it helps the banks having the money go up and down and them having to move it, rather than it just staying in the account so they can use.

By having a 'use or lose it' provision on receiving interest, banks benefit from the percentage of customers who fall through the cracks of the £1000 (every month) funding cycle. Then there's the number who don't do anything when the rate changes after 1 year. They get to market a 'better' product than is actually being delivered and in this way get some of the costs back. In fact 'free' banking isn't free in the same way that credit cards don't really offer 'interest-free' purchases. They do - just not every customer gets them.

adindas

malc_b wrote: »

BTW does anyone else think it is a daft state of affairs to have to go to such lengths to get a decent interest rate? The only useful thing about all the banks forcing us to have interest current accounts is at least then you have lots of bank accounts to set up the £1000 transfer pm they all require. The same £1000 goes around, which with FP is no loss of interest. Not sure how it helps the banks having the money go up and down and them having to move it, rather than it just staying in the account so they can use.

This is a current account, it is different with a saving A/C. It is difficult nowadays to find flexible saving paying 2.5%. Current account is set up for a long term relation where they are expecting you do your daily banking needs.

Their CEO, directors get credit due to the number of new customers opening a new accounts with them. This credit could be converted to bonus when they meet their target.

Optimizing a short term goal is where most of the banking CEOs get their fat bonuses. If their action is not profitable in long term who cares, they are already left for other banks.