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Nationwide Flex account interest sneaky tricks
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MiserlyMartin
Posts: 2,284 Forumite


I just thought I should post this in case anybody else is in the same boat and was not aware of this. Sorry if this has already been discussed. I just spotted this in the small print for Flexaccounts:
"Amount paid in* Gross p.a/ AER** Net p.a
£1,000+ per month 4.25% 3.40%
*Excludes internal transfers from Nationwide accounts
Basically this means that if you have another nationwide savings account and you use it to fund the flex account, to pay into other savings accounts or other bills, this money will not be counted by Nationwide when they calculate the interest. For example, with the Barclays ISA fiasco I had £3000 sitting waiting in the Flexaccount waiting on barclays to draw on the cheque. I had thought I was earning interest in the Flexaccount, but I wasn't it now seems. I regularly have moved large sums of money for a number of years from e savings to flexaccount to transfer to ICICI, Hi Save and other 'top rate payers' and now I see that I have never earned any interest while it has been waiting to be taken !! Has anyone else noticed this? Another thing I have not been able to find the answer to is what happens if you don't fund the account with £1000 in one month. Does that lose you the whole years interest at 4.5% or just for that particular month?
Anyway, now I need to think of a better way to fund these savings transfers. Halifax's current account does not seem to have this restriction with internal funding (it pays the interest up to £2500) at 6.17% AER. Its possible to link the account to a 'websaver' and balances are transfered internally instantly but the websaver only pays 5% as opposed to e savings 5.5%.
Another way around it is to wait until you have some incoming money from a non nationwide account (in the Flex) and then use that money to pay another bill or savings account. Any other suggestions would be helpful please.
"Amount paid in* Gross p.a/ AER** Net p.a
£1,000+ per month 4.25% 3.40%
*Excludes internal transfers from Nationwide accounts
Basically this means that if you have another nationwide savings account and you use it to fund the flex account, to pay into other savings accounts or other bills, this money will not be counted by Nationwide when they calculate the interest. For example, with the Barclays ISA fiasco I had £3000 sitting waiting in the Flexaccount waiting on barclays to draw on the cheque. I had thought I was earning interest in the Flexaccount, but I wasn't it now seems. I regularly have moved large sums of money for a number of years from e savings to flexaccount to transfer to ICICI, Hi Save and other 'top rate payers' and now I see that I have never earned any interest while it has been waiting to be taken !! Has anyone else noticed this? Another thing I have not been able to find the answer to is what happens if you don't fund the account with £1000 in one month. Does that lose you the whole years interest at 4.5% or just for that particular month?
Anyway, now I need to think of a better way to fund these savings transfers. Halifax's current account does not seem to have this restriction with internal funding (it pays the interest up to £2500) at 6.17% AER. Its possible to link the account to a 'websaver' and balances are transfered internally instantly but the websaver only pays 5% as opposed to e savings 5.5%.
Another way around it is to wait until you have some incoming money from a non nationwide account (in the Flex) and then use that money to pay another bill or savings account. Any other suggestions would be helpful please.
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Comments
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MiserlyMartin wrote: »Another thing I have not been able to find the answer to is what happens if you don't fund the account with £1000 in one month. Does that lose you the whole years interest at 4.5% or just for that particular month?FlexAccount Interest
We pay credit interest based on the total amount paid in each month.
Monthly credits that are accepted to qualify for credit interest are cash, cheque or transfers from non Nationwide accounts (for example a BACS credit into the account). The only exclusion is internal transfers from another Nationwide account, including interest payments from other Nationwide accounts. The total amount can be made up of any number of eligible credits over the month.
Once the interest rate has been calculated from the total number of credits paid in that month, that rate is applied to the balance of the FlexAccount for the whole month up to a maximum balance of £3,000. Residual balances over and above £3,000 will earn interest at the lowest published rate of interest. The rate can change from month to month depending on the credits paid in each month.0 -
How is it a "Sneaky Trick?
Were there not that condition, you could just churn the same cash from one account to the other at will until you reached the magic figure. They pay this high rate of interest (compared to 0.10% with the big four) to attract new money to the society. The condition has always been there, perfectly clearly, not hidden in small print.
I don't think NW are perfect, by any means but the level of paranoia being directed over things like this is not healthy.0 -
MiserlyMartin wrote: »I just thought I should post this in case anybody else is in the same boat and was not aware of this. Sorry if this has already been discussed. I just spotted this in the small print for Flexaccounts:
"Amount paid in* Gross p.a/ AER** Net p.a
£1,000+ per month 4.25% 3.40%
*Excludes internal transfers from Nationwide accounts
Basically this means that if you have another nationwide savings account and you use it to fund the flex account, to pay into other savings accounts or other bills, this money will not be counted by Nationwide when they calculate the interest.......
You have misunderstood that section of the T+C. What it says is an amount of at least £1000 per month has to be paid in from an external account in order for you to earn 4.25% gross on all balances up to £3000 in the Flexaccount.
This is no different (apart from the interest rates) to the Halifax offering.
http://www.nationwide.co.uk/current_account/rates.htm
Nigel0 -
This is no different (apart from the interest rates) to the Halifax offering.
I'm not sure that's correct. I can't find any reference to 'new money' in the Halifax HICA T&C's.
Indeed, I'm told by another MSE who has both Halifax and BoS HICA's (and a couple of websavers I believe) that internal transfers between these accounts do indeed count towards valid credits in order to retain the 6.17% interest rate on the first £2.5K.0 -
YorkshireBoy wrote: »Hi noh,
I'm not sure that's correct. I can't find any reference to 'new money' in the Halifax HICA T&C's.
Indeed, I'm told by another MSE who has both Halifax and BoS HICA's (and a couple of websavers I believe) that internal transfers between these accounts do indeed count towards valid credits in order to retain the 6.17% interest rate on the first £2.5K.
Hi YorkshireBoy,
you're right I also can't see any requirement for the funding to be external in the HICA T+Cs. I just assumed that it would have to be external . My mistake.
Nigel0
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