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

hoc

colsten wrote: »

And will you make more interest than you would have made in the 2% Regular Savings account? If not, why not?

The 5% (which I have just opened) will make less interest than my 2% Regular Savings due to the amounts involved.

5% on 500 monthly increases brings about 160 gross at the end of the year. 2% on 1000 monthly increases brings about 130 gross, so less on 12 month comparison, but the Regular Savings (unlike the Regular Saver) didn't end after 12 months so the interest was over the balance accumulated over years, in my case about 30k or 600 a year. 2% was still better than typical savings accounts of 1.6% left after the usual current and regular account deals.

For the next 12 months, it isn't either or. I will add 500 to the 5% and continue with 1000 to my old 2%, so good news. I am not bitter if that's what you implied, I am merely stating Nationwide must have calculated the loss of balances built up in the never maturing Regular Savings just as they know majority won't keep Regular Saver after maturity at 0.5% or whatever. Or maybe the majority left after the drop from 2.5%.

Actually, other than their cash ISA and this deal (assuming rinse and repeat is OK, unlike the Flex current bonus) is about all that is attractive from Nationwide. The Loyalty Savings (5 year customer get 1% gross, 15 year 1.2%- which is funny and embarrasing) is a good example of how the end to the Regular Savings completes Nationwide's transformation to be just like any other bank, not the 'on your side' banking society they try so hard to market.

Glen_Clark

Amazing.
Nationwide sent me a letter offering me £25 and 12 months interest free plus 0.5% cashback to take out a credit card.
So now

I am borrowing from the Nationwide interest free, and lending it back to them at 5%. Then getting cashback on top

redux

Glen_Clark wrote: »

Amazing.
Nationwide sent me a letter offering me £25 and 12 months interest free plus 0.5% cashback to take out a credit card.
So now

I am borrowing from the Nationwide interest free, and lending it back to them at 5%. Then getting cashback on top

Quantitative easing turning inside out and trickling down

But maybe some of the pundits want us to spend it, instead of saving up and waiting for prices to drop.

Pincher

Same sort of thing with Tesco Bank.


You get 3% for £3,000 from Tesco current account.


In November, got £6 = £7.50 - tax £1.50 .


In May 2015, there was a NO FEE 0% BT credit card from Tesco Bank. Got it for £25 cashback through Quidco. Tesco kept rejecting the cashback, but finally paid up in November.


The No Fee deal seems to have gone, but the 2.9% Fee 37 month 0% BT is not bad.


£72 + £25 in year one. No money down.

Kim_13

Don't think I qualify at the minute (downgraded FlexPlus middle of Nov and didn't pay in £750 that month.) Oh well, I'll up my pay ins and apply in 3 months or when my TSB Saver is up.

Hopefully this account won't be setting a record for the shortest time on offer.

TartanSaver

I have a strong suspicion the variable rate will go down after a few months after lots of people are reeled in. But since there are no withdrawal penalties, and interest is calculated daily and paid on anniversary or account closure, there's really no downside. Opened one just now.

hoc

TartanSaver wrote: »

I have a strong suspicion the variable rate will go down after a few months after lots of people are reeled in. But since there are no withdrawal penalties, and interest is calculated daily and paid on anniversary or account closure, there's really no downside. Opened one just now.

Rate change to regular savers must be rare, never encountered one in all I have. Of course, anything can happen but I don't see cause for "a strong suspicion".

tg99

TartanSaver wrote: »

I have a strong suspicion the variable rate will go down after a few months after lots of people are reeled in. But since there are no withdrawal penalties, and interest is calculated daily and paid on anniversary or account closure, there's really no downside. Opened one just now.

I highly doubt it. It is unlikely they would have reeled anywhere near enough people in after just a few months to make such a rate cut worthwhile not to mention this would then potentially deter people from opening other Nationwide products in the future. So can't envisage many scenarios where this would make economic sense for Nationwide.

TartanSaver

Perhaps "strong" suspicion was a bit over the top. However my logic is thus: all three HSBC 6% incarnations (FD, HSBC, M&S) are fixed. TSB 5% is fixed. Club Lloyds 4% is fixed. Despite the article on MSE claiming the Nationwide is "Rate: 5% AER fixed for 12 months", this is not the case. It is clearly described as variable. I have never been aware of a regular saver being variable before, always explicitly fixed.

After all, what if the rate fell but they had a hefty interest penalty for closing the account? The FD one for example, pays 0.05% if you close the account early, less than 1/100 of the regular saver rate. I suspect that they'd have to allow you to move your money out without any penalty after a rate cut, hence the absence of withdrawal penalties.

colsten

My KRBS Regular Saver has been 4% variable for a few years now. I don't think you can read anything much into it when a rate is variable. Clearly, Nationwide will be able to vary the rate on their Regular Saver in line with clause 29 of their Savings General Terms and Conditions, or they could withdraw the product from sale to new customers etc etc.. It doesn't mean they will actually do it.

I will worry about any cuts as and if they might occur.