flexdirect 5% pay in questions

piercy08

Hi, so i was looking at the flexdirect current accounts and was wondering for a few more details on how they might work. So, if i have to pay in £1000 a month and then I get 5% back on the first £2500 of each month.

So lets say i pay in £2500 in 1st January but then i use it like a normal current account so my balance ends up at say £100 on 31st January. Do i still get the 5% interest on £2500, id assume so, unless the money has to sit there a month? And in which case, whats to stop me from paying in £2500 a month and then immediately moving it to another account with a different interest rate? I'd get 5% + whatever i get on the other account right?

Even if it has to sit there a month, whats then to stop me leaving it with a balance of £2500 then paying into it and withdrawing back down to £2500?

Basically i'm unsure how the percentage gets applied and the way its worded seems like it would be more beneficial to pay in and then move the money elsewhere than leave it in there.

Cheers,

[Deleted User]

From their website:

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

https://www.nationwide.co.uk/products/current-accounts/flexdirect/rates-fees-overdrafts#xtab:tab2

piercy08

you dont know how many times i read that page, and missed that statement. Thank you for the information.

PRAISETHESUN

Interest is calculated daily and paid monthly - you need to leave the money in for the full month to get the max interest. The minimum monthly pay in is separate and can be removed as soon as it is paid in

StokieBecks

You need to leave £2500 in the account at all times for the 12 months you get 5% if you want to earn maximum interest.

They aren't going to pay you interest for money that isn't in the account

SlovakianGuy

I had £2500 sitting in FlexDirect all the time.
If you leave it there, you'll get £10.38 or £10.33 every month, £9..something for February.

eskbanker

StokieBecks wrote: »

You need to leave £2500 in the account at all times for the 12 months you get 5% if you want to earn maximum interest.

Strictly speaking, if you leave £2500 in the account at all times for 12 months, you'll earn 4.89% interest, i.e. £122.25, because the interest needs to compound to achieve the stated AER and it can't do that if the balance is at the maximum interest-earning level....

Zanderman

piercy08 wrote: »

..... So, if i have to pay in £1000 a month and then I get 5% back on the first £2500 of each month....

In addition to existing replies, and possibly stating the obvious, do remember that the 5% is the annual rate!

So you don't literally get " 5% back on the first £2500 of each month" you get "5% annual interest back on the first £2500 of each month" (i.e 1/12 of 5% back on the first £2500 of each month).