Nationwide savings accounts increase interest rates from 1st February

where_are_we

Thanks to Section62 for posting that Nationwide are increasing some of their interest rates from 1st February.

https://www.nationwide.co.uk/-/assets/nationwidecouk/documents/savings/branch-notices/smd363-base-rate-branch-and-online-notice.pdf

The interesting ones for me are Flex Regular Saver up from 2% to 2.5%, Start to Save (legacy product) up from 1% to 1.25% (more than compensates for loss of "Draw"), Help to buy ISA (legacy product) up from 1% to 1.25%.

EssexHebridean

Good gen - thanks for posting. Flex Regular is now definitely looking like a decent bet, and like you I'm cheerful about the Start To Save rate as well. The other for me is the Loyalty Saver as I have one where I keep my "personal emergency fund" - not a huge amount in it but as what is there is staying there I'll take whatever I can get on it! 

david72

Am I right in thinking that Start to Save was intended to have a 2 year fixed lifespan and would convert into an ordinary (and presumably lower interest) savings account once it reached that point, or is this welcome rise in the interest rate an indication that this is no longer the case (or that I am misremembering)?

@EssexHebridean, if you have a Loyalty Saver account, its new interest rate of 0.4% is still sadly fairly meagre (it stopped being any kind of actual loyalty reward quite some time ago) and can be beaten by at least 0.2%-points (or 50% more interest) by a fair number of other instant access accounts.

wiseonesomeofthetime

Start To Save is a two year product with a variable rate, meaning it can change during those two years, just like it is.

neurosurgeon

where_are_we said:

Thanks to Section62 for posting that Nationwide are increasing some of their interest rates from 1st February.

https://www.nationwide.co.uk/-/assets/nationwidecouk/documents/savings/branch-notices/smd363-base-rate-branch-and-online-notice.pdf

The interesting ones for me are Flex Regular Saver up from 2% to 2.5%, Start to Save (legacy product) up from 1% to 1.25% (more than compensates for loss of "Draw"), Help to buy ISA (legacy product) up from 1% to 1.25%.

What will happen to existing reg saver holders will the rate increase for them or not?

where_are_we

Existing Flex Regular Saver holders will benefit from Tuesday 1 February. Until the end of January the rate remains at 2.0%. The interest rate is variable and will apply daily to your balance. The good news is that my FRS will pay 2.5% on my balance of £800 on 1/2/22.

If you are a Nationwide current account holder and over 16 and have not opened a FRS yet, my advice is to be quick and open one before 1/2/22 and fund it immediately with £200 which will be your January maximum monthly payment. Then deposit £200 on 1/2/22 which will be your February payment. You will then be earning 2.5% on £400 from Tuesday. You can miss any monthly payments. If you only had £400 to save you could do what I have suggested and leave the £400 earning 2.5% for the rest of the year. You are allowed 3 withdrawals per annum without loss of interest so it is "almost" an easy access account.

williewonder

where_are_we said:

If you are a Nationwide current account holder and over 16 and have not opened a FRS yet, my advice is to be quick and open one before 1/2/22 and fund it immediately with £200 which will be your January maximum monthly payment. Then deposit £200 on 1/2/22 which will be your February payment. You will then be earning 2.5% on £400 from Tuesday. You can miss any monthly payments. If you only had £400 to save you could do what I have suggested and leave the £400 earning 2.5% for the rest of the year. You are allowed 3 withdrawals per annum without loss of interest so it is "almost" an easy access account.

Thank you for the wonderful tip @where_are_we

I've just done that and opened a Flex Regular Saver and deposited £200 and will deposit £200 tomorrow. Would it be best and deposit £200 on the 1st of each month? I know the interest will be paid on the anniversary  of account opening. How much would it likely be when I put £200 a month in for 12 months? Thank you. edit This is £26 a year interest.

FIREmenow

Thanks @where_are_we I had not registered this in the terms and conditions, but you are right the payment in is by calendar month not a month beginning on the anniversary date so I will be doing this tomorrow 👍

zagfles

williewonder said:

where_are_we said:

If you are a Nationwide current account holder and over 16 and have not opened a FRS yet, my advice is to be quick and open one before 1/2/22 and fund it immediately with £200 which will be your January maximum monthly payment. Then deposit £200 on 1/2/22 which will be your February payment. You will then be earning 2.5% on £400 from Tuesday. You can miss any monthly payments. If you only had £400 to save you could do what I have suggested and leave the £400 earning 2.5% for the rest of the year. You are allowed 3 withdrawals per annum without loss of interest so it is "almost" an easy access account.

Thank you for the wonderful tip @where_are_we

I've just done that and opened a Flex Regular Saver and deposited £200 and will deposit £200 tomorrow. Would it be best and deposit £200 on the 1st of each month? I know the interest will be paid on the anniversary  of account opening. How much would it likely be when I put £200 a month in for 12 months? Thank you. edit This is £26 a year interest.

Don't know how you worked that out. Usual approx formula for reg savers that last a year is monthly amount x 6.5 x interest rate (as the average deposit is in for 6.5 months assuming deposits go in on same day each month).

But with Nationwide deposits can be made anytime in the calendar month, so if you open one right at the end of the month and make subsequent payments on the 1st it's almost: monthly amount x 7.5 x interest rate , which would be a bit under £37.50. Will vary a bit with month lengths etc.

refluxer

@williewonder £26/year is the approx. interest that a regular monthly deposit of £200 @ the current Flex Regular Saver rate of 2% would earn after a year. 

The interest rate increase to 2.5% takes that to just over £32 for any new accounts opened tomorrow or (by the looks of zagfles' calcs above) around £37.50 if you made January's deposit when you opened the account yesterday and February's deposit tomorrow on the 1st.

If you haven't spotted it already, MSE's regular saver calculator can be found here.

Just note that it'll presumably be based on regular monthly deposits and so won't fully take into account cases such as this, where the actual amount received will be higher.

where_are_we

For any calendar month regular savers, maximum interest is achieved by setting a standing order to transfer the maximum allowed to your regular saver on the 1st of each month. Interest is paid daily on the balance. A couple of times in a year the 1st of the month is a non banking day ie Saturday, Sunday, or Bank Holiday in which case the SO payment will happen one, two or three days later. Manually making the payment on these occasions will increase your interest by a couple of pennies but l prefer the automatic SO for an easy life. The NWFRS allows a 13th monthly payment unless you open it on the 1st of the month. This means if you open it and deposit £200 today, maturity will be 30/1/23, then you can make 12 more monthly payments of £200 (1/2/22 to 1/1/23) achieving a final balance of £2600 and maximum interest. I think you will have to manually make the £200 February payment on the 1/2/22 because I`m not sure whether a SO can be set up to start so quickly. When you set up your SO`s chose either the number of monthly payments option or use the specified end option (1/1/23) so that payments don`t continue beyond the maturity date.