Nationwide e-savings

Baldytyke88

I recently moved £1k to my Nationwide e-savings account, thinking it would be a higher interest rate.

But I have just looked, and e-savings = 1.1% whilst the normal flex account is 2.5%

Is this just deliberate to catch people out?

In case of fraud etc, you wouldn't keep excessive amounts in your ordinary account

DRS1

I don't think Nationwide want your money at the moment.  I had a bond mature recently and that matured into an account paying 1.1%.  It didn't stay there.

etienneg

The moral of this is in your first sentence. Don't just "think" (or "assume"), but actually read what it says. However, your second sentence says you haven't done this accurately enough. The "normal flex account" (that is, their ordinary current account) does not pay any interest. The account that pays 2.5% is the Flex Instant Saver, which is a savings account.

These days many financial institutions have lots of accounts of various types, often with similar names. It's essential to be accurate in identifying them.

refluxer

It's been a long time since Nationwide's e-Savings accounts paid a competitive rate of interest - I closed my e-Savings Plus account back in March 2020 and the e-Savings account pre-dates the e-Savings Plus account, so the e-Savings account will have been paying a relatively poor rate of interest for at least the last 6 years.

It's not uncommon for a bank or building society to erode the interest rates on their savings accounts over time - this means that the onus is on us to keep any eye on the rates we're getting and close older legacy accounts in favour of new ones (either with the same bank or elsewhere) if the rates become uncompetitive.

Interest rates have been dropping recently but the good news for you is that you can still get rates as high as 4.40-4.50% for easy access savings at the moment, if you're prepared to look beyond the Nationwide.

flaneurs_lobster

Not sure why you would move your money to any account without checking the rate. 

Open a Cahoot Sunny Day Saver and get 5% on up to £3k for a year, or a Chase Saver at 4.5%. 

Don't agree that an "ordinary account" (do you mean current account?) is less secure than any other, if the usual precautions are taken, but it's true that the best interest rates will usually be found elsewhere.

dreaming

The Flex account which pays 2.5% is still a saver account rather than a current account, and is a reasonable alternative to the e-savings for those who need easy access with no withdrawal penalties (obviously loss of interest). You can then drip feed £200 per month into their Regular Saver for 6.5% which has no penalties for up to 4 withdrawals. It's easy to check all of the rates on their website and compare them to other institutions, so I'm not sure how they are "catching people out".

Rodders53

Compare savings accounts and ISA rates | Nationwide

Did you check the rates before transferring money?  Open a more suitable savings account and place the money there.  

My legacy Reward Saver account has dropped to 3% (was more earlier this year) and I've a triple access flexi ISA that pays 3.5% with them.  Regular saver could net 6.5% at present for £200 / mth drip fed to it?

My Flex account pays 0% interest.  So you must be in the 'honeymoon phase' where some interest is paid in the first year from opening?

A Flex Direct current account seems to pay more: 5% in first year dropping to 1% thereafter.

Albermarle

DRS1 said:

I don't think Nationwide want your money at the moment.  I had a bond mature recently and that matured into an account paying 1.1%.  It didn't stay there.

Many ( not all ) providers have low paying 'maturity accounts' for bonds that have matured.
It does not necessarily mean that the provider has poor interest rates for other accounts.

However in general I agree that Nationwide are not very competitive with their rates recently.

Baldytyke88

DRS1 said:

I don't think Nationwide want your money at the moment.  I had a bond mature recently and that matured into an account paying 1.1%.  It didn't stay there.

Years ago there was an outcry over old accounts being given a downgrade of the interest rate, wasn't there a promise or a new code of conduct brought in?

"Yes, there was a significant outcry over banks cutting interest rates on older, or "legacy," savings accounts. This led to intervention by the UK's financial regulator, the
Financial Conduct Authority (FCA), and the introduction of new rules and expectations rather than a specific voluntary code of conduct."

In July 2023, the FCA announced a 14-point plan for banks and building societies to ensure they were passing on interest rate rises to savers more appropriately. This included:

• Requiring firms with the lowest rates to provide a "fair value" assessment for their products.

Baldytyke88

Rodders53 said:

My Flex account pays 0% interest.  So you must be in the 'honeymoon phase' where some interest is paid in the first year from opening?

A Flex Direct current account seems to pay more: 5% in first year dropping to 1% thereafter.

They all have very similar names, so I guess I get 0% too; I have only recently acquired a cash buffer, I will need to find another place to put it.

I generally invest in my SIPP, I will consider my options.

friolento

dreaming said:

The Flex account which pays 2.5% is still a saver account rather than a current account, and is a reasonable alternative to the e-savings for those who need easy access with no withdrawal penalties (obviously loss of interest). You can then drip feed £200 per month into their Regular Saver for 6.5% which has no penalties for up to 4 withdrawals. It's easy to check all of the rates on their website and compare them to other institutions, so I'm not sure how they are "catching people out".

I would currently not consider 2.5% reasonable for an easy access account as we can still get double this amount elsewhere. 

The Nationwide RS is amongst the better Regular Saver accounts and well worth going for. They also had a relatively decent rate for a fixed term and rate account but this is now NLA. 

The remaining Nationwide savings accounts are easily beaten by offerings from other companies but it is worth checking regularly for the best rates in the market, and moving your funds if appropriate