Banking battle for customers heats up as Nationwide introduces 5 per cent interest

The battle for customers is more and more heating up within the UK banking scene with one main present account supplier now providing 5 per cent interest on balances up to £1,500 for the primary 12 months.

Nationwide Building Society beforehand provided 2 per cent mounted for 12 months on balances up to £1,500 on its FlexDirect account, however it’s greater than doubling the speed on supply to 5 per cent AER (annual equal price).

The 5 per cent introductory price is offered on new purposes opened from June 21. After 12 months, the account pays 0.25 per cent AER.

Members can solely profit from the introductory credit score interest price and interest-free overdraft supply as soon as, that means anybody who has beforehand held a FlexDirect account won’t be eligible for the brand new price.

However, if candidates have beforehand held a sole account solely, they’d be eligible for the introductory price on a joint account and vice versa.

Members might want to pay in £1,000 per month, not counting transfers from different Nationwide accounts or Visa credit.

Switching accounts

Those switching their present account may additionally profit from the Society’s switching incentive, which pays £125 to current members who change their present account to the Society and £100 to new customers.

To qualify, switches have to be constructed from one other supplier utilizing the Current Account Switch Service (Cass) and not less than two energetic direct debits have to be transferred as a part of the transfer to the brand new account.

Debbie Crosbie, chief government at Nationwide Building Society, mentioned: “This market-leading price will assist new and current members take advantage of their cash, which is especially necessary proper now.

“The FlexDirect current account also has an introductory interest-free overdraft to give some peace of mind to those struggling financially and freeing them to focus on repaying other debts.”

Nationwide mentioned that, combining the £125 switching incentive with £75 interest that folks may probably obtain from the 5 per cent interest price, folks may benefit from a £200 enhance over the course of a 12 months if they’ve not less than £1,500 of their account over the subsequent 12 months.

FlexDirect additionally affords an interest-free overdraft for the primary 12 months, that means eligible candidates can change their overdraft from their current present account supplier or one other Nationwide account.

After the preliminary 12 months, the overdraft interest price is 39.9 per cent and the overdraft that somebody is obtainable within the first place will rely on particular person circumstances.