Nationwide launch new 5 per cent regular saver for current account customers

King_Of_Fools

Rollinghome wrote: »

Say Nationwide: "Please note: when you register for SavingsWatch you are consenting to receive marketing communications by letter, telephone, email, SMS and other electronic means relating to SavingsWatch and other Nationwide products and services. Even if you had previously notified Nationwide that you did not wish to receive marketing communications."

If they changed the terms of an account two days ago then they should inform their customers regardless of whether they've signed up for their junk mail and texts.

They are also writing to all holders of the Regular Savings account, see:
http://www.nationwide.co.uk/~/media/MainSite/documents/products/savings/terms-and-conditions/FSUA41-flex-service.pdf

Robbieh

Am I right in thinking that paying in 500 mth, will return £150 int. for 12mths (£6000)?

YorkshireBoy

Robbieh wrote: »

Am I right in thinking that paying in 500 mth, will return £150 int. for 12mths (£6000)?

No you wouldn't be right. It's not as simple as dividing by 2, due to 'front-loading' which skews it somewhat.

For a 12 month regular saver, and assuming equal payments/same credit date each month, the gross interest is calculated as follows:

(12 x monthly deposit) x AER / 12 x 6.5

Where 6.5 comes from:

1st payment earns 12/12ths of a years interest
2nd 11/12ths
and so on until
last payment earns 1/12th

12/12 + 11/12...+ 2/12 + 1/12 = 78/12 = 6.5

colsten

Hopefully you will feed your £6,000 from an interest-paying current account, so you won't just get the interest from the Regular Saver.

You can work it all out in a spreadsheet, or you can cheat like I do and use the excellent MSE Regular Savings Calculator.

Robbieh

Thanks guys, the money (6000) is not in a interest making acc. So would I be better off putting it in 2 x Tesco £3000 accs. For 3% maybe? I have 6 current accs. Already, thanks.

colsten

2 Tesco current accounts would make ideal feeder accounts for the Nationwide FlexClusive RS.

Robbieh

Ok, thanks

YorkshireBoy

Robbieh wrote: »

Thanks guys, the money (6000) is not in a interest making acc. So would I be better off putting it in 2 x Tesco £3000 accs. For 3% maybe? I have 6 current accs. Already, thanks.

I gave you the regular saver interest formula above.

The Tesco formula is more or less the same (except you use the gross p.a. rate here as there's no compounding if you're maxed out, and ignore the 6.5 month multiplier)...

So you're comparing:

£6000 x 5% / 12 x 6.5 = £162.50

with

£6,000 x 2.96% = £177.60

But, as colsten highlights above, if you feed the reg saver from Tesco then you get interest from both accounts:

(£6,000 x 5% / 12 x 6.5) + (£6,000 x 3% / 12 x 5.5) = £245

And £245 / £6000 gives an overall return of 4.08%

Notes:

You can use the AER in the drip-feeding calculation as you will benefit from compounding on Tesco this time.

The 5.5 figure is 12 months minus the aforementioned 6.5 months.

Robbieh

Thanks YorkshireBoy, I'm fairly new to all this and it takes a little while for it to sink in. I understand now about drip feeding and it's benefits now you've explained it so thanks again.

ratechaser

Oh !!!!!!... Just seen this thread as obviously Nationwide have not bothered to contact me. So the 2% regular saver that I've been patiently building a very large balance in over the past few years now has a 12 month life span. Ok the rate wasn't great but it was an ok place to park some spare money. Not any more. And no, don't have a flex direct account so the 5% saver isn't an option right now.

So it's effectively bye bye nationwide for me... You can keep my kids JISA cash as long as you don't screw with that rate, and I'll keep a hundred quid in my share account because frankly you're acting like any other bank now so why not just demutualise and give me some shares!

Sorry if this is a bit of a rant, but I remember the days where Nationwide used to offer better and more straightforward savings accounts and bonds for members without having to play the current account game. I know it works for a lot of you, I just think it's a bit of a shame...