Nationwide BS offer market-leading rate on high interest current account

The high-street provider now offers 5% Annual Equivalent Rate (AER) on its FlexDirect account for the first 12 months.

Nationwide BS has increased the introductory rate on its FlexDirect current account to 5% today, making it the top rate on the market for high interest current accounts.

“This market leading rate will help new and existing members make the most of their money, which is particularly important right now,” said Debbie Crosbie, Chief Executive at Nationwide Building Society.

The latest increase means Virgin Money’s Club M and M Plus accounts offer the next highest rate on the market at 2.02%.

It is worth noting that TSB do offer an interest rate of 2.50%, but it is only available to applicants between the ages of 16 and 19.

While Nationwide BS’s new rate may be market-leading, it is fixed for 12 months from account opening. Once this period has expired it will revert to a variable rate which stands at 0.25% at the time of writing.

In order to access this rate, the FlexDirect account will need funding of £1,000 per month, which does not include transfers from other Nationwide accounts or Visa credits.

In addition to this, the interest is only payable on balances up to £1,500.

Those who have owned a FlexDirect account in the past are not eligible to claim this interest rate solely under their own name. Instead, they will need to open a joint account with another eligible member who they have not shared a FlexDirect account with before.

“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,” said Crosbie.

However, it is important to note that introductory interest-free period is also fixed for 12 months. Once this period has expires an interest rate of 39.9% a year compounded will apply to each customer’s arranged overdraft.

Therefore, before using this as a financing option, consumers are encouraged to explore all their financing options to ensure this is their best option. Other forms of lending such as credit cards and loans could be preferable.

As an additional perk, the FlexDirect account is also fee free, so customers will not have to worry about monthly maintenance charges.

To see how this account compares against other high interest current accounts, use our table.

Consumers could be additionally incentivised to switch to a FlexDirect account by using Nationwide BS’s switching incentive.

New customers who switch to Nationwide BS with two existing Direct Debits will receive a cash incentive of £100 while current customers will gain an enhanced offer of £125.

It means customers making use of the £125 incentive and interest on a balance of £1,500 for one year can earn £200 in total.