How much do you get when 12 months is up?

shiwarrior

Been looking at getting this

"Get 5% interest on £2,500 FIXED for 12 months, though only 1% afterwards"

Open a Nationwide FlexDirect* account and you'll get 5% AER interest on the first £2,500 of your cash, fixed for a year, as long as you haven't had a FlexDirect account before and you pay in £1,000+ each month. Note that the rate drops to 1% after a year, which isn't such a good deal.

Unusually for a current account with perks, you don't have to set up any direct debits to be paid in – you can just open it as an extra account. But you do need to pass a credit check to get it.


But i have a question, is this interest paid monthly or yearly?
and if i put in £2500 as my deposit and then put another £1000 in each month, am i allowed to take out the £1000 ive just put in (keeping the account at £2,500 ?)

thanks

eskbanker

shiwarrior wrote: »

But i have a question, is this interest paid monthly or yearly?

https://www.nationwide.co.uk/products/current-accounts/flexdirect/rates-fees-overdrafts:

Important information

How we pay interest

On the last day of each month we calculate the interest you've earned each day of that month and then pay you this interest on the 1st day of the next month.

shiwarrior wrote: »

and if i put in £2500 as my deposit and then put another £1000 in each month, am i allowed to take out the £1000 ive just put in (keeping the account at £2,500 ?)

Hang on, that's two questions now! Answer to the second one: yes (it's a current account after all....)

shiwarrior

cheers

so does that mean im getting £125 a month / £1500 a year interest ?

sounds good to me

fiestaman87

shiwarrior wrote: »

cheers

so does that mean im getting £125 a month / £1500 a year interest ?

sounds good to me

No, you'll get about £125 for the whole year.

eskbanker

If you keep your account fully loaded with at least £2,500 in it at all times then you'll earn £122.25 in interest over the first year.

This is at the 4.89% gross rate, as you can only earn the full 5% AER if interest compounds each month (which it can't if you're at the maximum interest-earning limit).

shiwarrior

got it!
Thanks for the help