Regular savers looking for a decent rate of interest will be cheered by Nationwide’s latest launch, paying 5% AER for one year.
Nationwide Building Society’s new Flexclusive Regular Saver account pays 5% AER on regular deposits of up to £500 per month, allowing a maximum investment of £6,000 over 12 months.
However, this account is only available to its existing bank account customers. It will therefore only be practical if you have a Nationwide bank account from its ‘Flex’ range.
Click on the link to visit Which? Money Compare and find out more about the Nationwide Flexclusive Regular Saver account.
How does the Nationwide account compare with the market?
Although it doesn’t offer the best rate on the market, this account does allow more to be paid in each month compared to its rivals. It also comes with greater flexibility by allowing customers unlimited access to their savings without incurring a penalty.
First Direct, HSBC and M&S Bank all offer 6% AER, but the maximum monthly limit is just £300, £250 and £250 respectively. Furthermore, if you access your money during the 12-month term, it will result in account closure and your interest being paid at a lower rate.
TSB offers 5% AER on its regular saver account, but the maximum amount you can save each month is capped at £300.
How much interest does it pay after 12 months?
Customers paying in £500 each month (£6,000 a year) into the Nationwide account will earn £163 before tax. However, you’d earn less – around £117 before tax with First Direct and around £97 with HSBC and M&S Bank.
Regular saver accounts typically offer far better rates than traditional instant-access savings accounts, although you can typically hold larger balances in instant-access savings accounts.
Currently topping the Which? Money Compare instant-access tables is Tesco Bank offering a rate of 1.5% AER. (We have excluded accounts with certain qualifying conditions and restrictions on withdrawals.) If you deposited a lump sum of £6,000 into this account, you’d earn £90 before tax.
It’s worth remembering that monthly savings accounts are only for those who can commit to putting a regular amount of money away each month.
Find the best savings account
The Which? Money Compare tables let you search hundreds of savings accounts and cash Isa deals from providers large and small so that you can find a good home for your nest egg. We also combine this with our unique customer scores that show you how well the providers featured are likely to treat you in the long run.
- Have your savings questions answered – call the Which? Money Helpline
- Read our comprehensive expert guide to how to find the best savings account
- Look at our table to find the best bank accounts paying credit interest
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