As a result of the historic low interest rate environment and to ensure the Society continues to support its entire membership, Nationwide’s FlexDirect account will pay, from 1 May 2020, credit interest of 2% AER (1.98% gross) on balances of up to £1,500 for the first 12 months. After that period, the rate will revert to 0.25% AER (0.24% gross) on balances up to £1,500.
This is the first reduction to the credit interest rate on FlexDirect since the account was launched in November 2012. Despite this change, FlexDirect continues to offer one of the highest rates of credit interest on the market.
Any FlexDirect accounts applied for prior to 1 May will continue to receive credit interest of 5% AER (4.89% gross) on balances of up to £2,500 for the remainder of their 12-month introductory period. Any existing FlexDirect members outside the introductory period will have their credit interest rate reduced to 0.25% AER, on balances of up to £1,500, from 1 July (from 1% AER).
Nationwide’s FlexStudent and FlexGraduate accounts will no longer offer credit interest from 1 July 2020, while the credit interest on the Society’s FlexOne will be reduced to 0.10%. These changes affect both existing account holders as well anyone opening these accounts from that date.
The Society will be writing to all impacted current account holders notifying them of the change in credit interest rate.
As a result of the focus the Society currently has on supporting existing members impacted by coronavirus, Nationwide has taken the decision to pause its Recommend a Friend offer from today (Monday 6 April). Any current account switches made before this date will be honoured ensuring the member and new member will each receive their £100.
Sara Bennison, who oversees Nationwide’s products and propositions, said: “We know that this is a tough time for savers, particularly after two cuts in Bank Rate in quick succession taking it to an historic low of only 0.10%. In order to preserve the long-term sustainability of the Society for all our 16 million members, we have had to take these decisions on the interest rates we can offer on a number of our accounts. We have tried to remain as competitively priced as possible, with our FlexDirect account, for example, remaining one of the best in the market for credit interest and our savings prize draws helping people into good savings habits.”