Big news for 3.85 million Nationwide customers. You will see a payment of £100 in your current accounts between June 13 and June 28.
The payment made by Britain’s largest building society is called Fairer Share and this marks the second year in a row.
You must have had a current account opened on March 31 this year and also have at least £100 in a savings account or outstanding on your mortgage.
In addition, there are many conditions depending on the type of checking account you have, when you opened it and the number of transactions.
There is no doubt that for Nationwide savers this is a welcome addition to the interest they earn.
Conditions: To get the £100 payment from Nationwide, you must have a current account opened by March 31 this year. You should also have £100 in a savings account or in your mortgage.
But I think many would be better off moving some of their easy-access savings into a more robust account. Nationwide’s easy access base rates are well below the industry-wide average of 3.11 percent.
Nationwide’s easy access base rates are well below the industry-wide average of 3.11 percent.
Its Instant Access Saver pays 2.25 per cent on sums up to £10,000. With £5,000 in your account, you’ll earn £112.50 interest in one year.
Add the £100, which is taxed in the same way as savings account interest, and you end up with £212.50, bringing your rate to 4.25 per cent – not bad for an easy-to-pay account. Branch-based access.
The best deals elsewhere pay 4.81 per cent (Family BS) and 4.96 per cent (Kent Reliance).
At £10,000, the rate is 2.3 per cent, so the total interest, including payment, is £330, or 3.3 per cent.
So my recommendation is to keep no more than £5,000 in the account and move the extra money elsewhere.
Nationwide will let you know if you qualify by Friday.
It is also offering a new balance bonus of up to £10,000 to all of its 16 million members at a top rate of 5.5 per cent locked in for 18 months and is offering a £200 ‘welcome’ payment to those who switch to your checking account. .
This beats Lloyds Bank’s £175 offer launched yesterday.
The dual incentives appear to be working. Nationwide gained 163,363 new current account customers in the final three months of last year, according to figures from Pay.uk.
This is well ahead of its nearest rival, Barclays, with 12,823, and Lloyds, the next best, with 5,000.
The problem with Fairer Share is that only about a quarter of Nationwide members are eligible.
It is handing out a total of £385m to eligible members, up from £340m for a similar payout last year.
sy.morris@dailymail.co.uk
Why the NS&I rate hike was a secret
National Savings & Investments has quietly raised the rate on two of its variable accounts.
As of last Thursday, your Direct Saver Easy Access account pays 4 percent, up from 3.65 percent.
Income Bonds (an easily accessible account that pays interest monthly and tends to be popular with pensioners) has risen from 3.59 per cent to 3.93 per cent.
Both new and existing savers will benefit from the rate increase.
However, its tax-free Direct Isa appears to be stuck at a modest 3 per cent. Last month I predicted that NS&I would have to do something to attract savers and meet the lofty £9bn funding target it has set.
NS&I planned to announce the changes last week with the usual fanfare, but the election announcement scuttled that plan.
As a government agency, it cannot be considered to do anything that could influence your vote.