Bank Accounts that Pay Interest

DaisyBryar

This is probably a stupid question, but I just can't get my head around it.

Nationwide have a current account (FlexDirect) with an introductory offer where, every month for the first 12 months, you get 5% interest (AER) on any income over £1,000. Does that honestly mean that if you deposit £1,000 every month, you get £50 per month free, totaling £600 extra for free that year???

This is way more than any of my savings accounts have ever paid so I'm convinced I've missed a trick somewhere, because they can't possibly be giving people £600 MINIMUM for free.

I've only ever dealt with annual interest so maybe I'm missing some vital information regarding monthly interest?

jonesMUFCforever

No; they are not they are paying 5% per year or around 0.4% per month.
It is also capped at a balance of £2500.

18cc

5% per annum on a maximum balance of £2,500 is a maximum interest of £125 in the first year .

not bad add but not as good as for example the £175 paid for switching to HSBC