Nationwide Building Society offers 'highly attractive' 6.5% interest savings account

Nationwide Building Society is offering Brits a “highly attractive” 6.5% interest rate AER on its regular savings account.

Regular savings accounts can be a good option for those looking to get into a savings habit, as these accounts typically offer higher interest rates and the terms generally encourage savers to pay money into the accounts monthly. Customers can launch Nationwide’s Flex Regular Saver with just £1, with interest paid on the anniversary of opening. Monthly deposits are capped at £200, allowing for a maximum total contribution of £2,400 over 12 months. Based on current rates, that would earn £84.50 in interest over a year.

The account is available to UK residents aged 16 or over who hold a Nationwide Building Society current account.

This account is more flexible than what’s typically expected from a ‘regular’ savings account, because up to three withdrawals can be made without penalty. However, after the fourth, the interest rate will drop to 1.25%.

Commenting on the deal, Rachel Springall, finance expert at Moneyfactscompare, said: “Nationwide’s Flex Regular Saver pays a highly attractive rate of 6.50% on deposits. Unlike a few other regular savings accounts on the market, it allows savers to make three withdrawals without impacting the rate, which is incredibly helpful for those who may need to dip into their pot for emergencies.”

However, she added: “As with any account, it's essential consumers compare details carefully and take full advantage of any perks, especially if it charges an account fee.”

Savers can still benefit from higher interest rates despite the Bank of England’s latest Base Rate cut to 4%.

Principality Building Society is still topping the table for regular savers with an Annual Equivalent Rate (AER) of 7.5%. The account runs for six months, and interest is paid on maturity.

Savers can invest up to £200 per month, allowing the pot to grow to a total of £1,200, and withdrawals are not permitted until the account matures. So, while it may have a market-leading AER, its six-month term limits the total interest earned. With a maximum investment of £200 per month, savers will end up with £1,227.53, including £27.53 in interest.

Zopa offers a 7.1% AER over 12 months with a maximum limit of £300 per month, allowing savers to amass £3,600 in total savings. Interest is paid at the end of the term, with a full £3,600 deposit expected to earn around £137. This will bring the total balance to approximately £3,737. Savers are allowed to withdraw money from the Zopa savings account at any time without penalty

First Direct is just behind with a 7% AER over 12 months. The account allows a monthly deposit of £300, which can also total up to £3,600 in savings over a year. At the end of the term, First Direct says savers will amass around £3,736.50, including £136.50 in interest.

On the benefits of regular accounts, Ms Springall said: “No doubt there will be consumers who feel it’s too much of a hassle to regularly put away some cash, or they have just left it too late.

“This couldn’t be more wrong, because saving little and often is the key to building a pot. Having an emergency fund is a great start to building up financial resilience and being less reliant on short-term credit.”

She added: “Regular savings accounts are ideal for slowly building a pot as they instil the savings habit; however, consumers will need to work out if they are the right choice for them, as some can be restrictive and might not be suitable for larger deposits.

“Regular savings accounts can also revert to a flexible account after the term ends, which might not pay a good rate, so savers must make a diary note to reinvest it elsewhere.”