You are using an older browser version. Please use a supported version for the best MSN experience.

Nationwide offers competitive 5% interest rate on regular savings account

Daily Express logo Daily Express 02/02/2023 Katie Elliott
Nationwide, person online banking © GETTY Nationwide, person online banking

Regular accounts are currently offering some of the most competitive interest rates on the market. But, not only is affording savers a five percent Annual Equivalent Rate (AER), it's also providing an opportunity to boost savings even higher through three £250 prize draws.

Regular savings accounts are a good option for people looking to start building up a savings pot, as these accounts typically offer some of the highest interest rates on the market and the terms generally encourage savers to pay money into the accounts monthly with limited withdrawals.

Nationwide BS' Start to Save (Issue 2), as mentioned, is also offering the benefit of an additional reward to be snapped up through three prize draws.

Savers can open the account with a minimum deposit of £25 and up to £50 can be invested each month.

Interest is calculated daily and paid annually on the anniversary of the account opening but the rate is variable, which means it can go up or down depending on the terms.

READ MORE: Savings accounts lose money as ISAs 'slow to pick up' rising interest


Bank of England interest rate graph © PA Bank of England interest rate graph

It is an online account, savers must be 16 or over to open, and as it offers instant access, withdrawals are permitted whenever needed. However, this will have an impact on the qualifying for the prize draw.

To be entered into a prize draw, savers will need to increase their account balance by at least £25 (but by no more than £50) in each of the six calendar months leading up to the month of the prize draw.

For example, to qualify for the prize draw on February 21, 2023, the total balance in the account needs to increase by at least £25 in August, September, October, November, December and January. However, the building society notes there are additional conditions to meet to be in with a chance of winning.

DON'T MISS: Lloyds Bank customers can get 5.25% interest rate with limited account [INSIGHT]Two-thirds of Brits have stopped buying non-essentials amid crisis [ANALYSIS]Mortgage expert issues key tips to help 'stave off' interest rate rise [EXPLAINED]

Man online banking © GETTY Man online banking

A statement from the building society reads: "If you increase your balance by more than £50 in a month running up to a prize draw, you will not be entered for that prize draw."

It continued: "If you take money out of your account during a calendar month, then you may need to pay some or all of it back in. For example, if your account balance is £100 at the beginning of the calendar month and you then take out £25, you'll need to pay in at least £50 [back in] to increase the balance to at least £125 by the end of the calendar month."

It also notes that interest and any prize draw winnings added to the account will not count towards the minimum required £25 balance increase. Prize draws will take place on February 21, 2023, August 22, 2023, and February 20, 2024.

Winners are selected at random from all accounts that qualify for the prize draw and each winner will receive £250.

READ MORE: New savings account paying 'top rate' 3.03 percent interest rate

With energy bills currently at eye-watering levels, over half a million people use wood-burning stoves to heat their homes this winter.

As thousands look to install a log burner in their home, industry experts are reporting fears of a potential shortage.

But should you get a log burner?

According to Nationwide BS, the chance of winning is between 1 in 34 and 1 in 67, depending on how big the prize fund is.

Savers who win will be informed by email or post and the £250 will be paid into the account within 30 days of the draw.

But while the Nationwide BS Start to Save (Issue 2) is offering an attractive deal, this isn't the highest rate available on the market for regular savings accounts.

Ranking top of the list is Moneyfacts Best Buys is NatWest's Digital Regular Saver with an AER of 5.12 percent.

The 5.12 percent interest rate is awarded to savings up to £5,000, after which a 0.5 percent rate will be awarded to figures from £5,001 and over.

There is no minimum deposit required to open the account and it allows people to save up to £150 each month. Unlimited withdrawals are permitted without penalty and interest is awarded monthly.

Placing second is Royal Bank of Scotland's Digital Regular Saver, also with an AER of 5.12 percent.

Like NatWest, the same interest rules apply to this bank account (5.12 percent paid up to £5,000, then 0.5 percent on any funds over), interest is applied monthly, and unlimited withdrawals are also permitted.

Placing third is Principality BS' Christmas 2023 Regular Saver Bond with an AER of five percent.

This one year bond requires a minimum £1 deposit to open and a maximum of £125 can be invested per month.

The account is intended for people who might want to save for something specific, and who won't need to touch the money during the course of the term. Because of this, withdrawals are not permitted. Interest is calculated on the money in the account each day and paid one year after opening.


More from Daily Express

image beaconimage beaconimage beacon