Major bank offers 6.5% interest rate on savings account but you'll need to act fast
The account can be opened with just £1, but is only available to those with a current account
Despite the decline in UK savings rates, there is one major bank that still offers competitive returns, making it one of the top choices on the market. With that in mind, savers may want to take note, as there could be benefits aplenty.
Nationwide's Regular Saver account still offers competitive returns of 6.5 per cent AER. Regular savings accounts typically require a set monthly deposit and limit withdrawals, making them perfect for disciplined savers looking to steadily increase their savings while earning higher interest than standard accounts.
Nationwide's Flex Regular Saver can be opened with just £1, and interest is paid each year on the account's anniversary. Monthly deposits are capped at £200, allowing a maximum contribution of £2,400 over the year.
At the current interest rate, this would earn £84.50 in interest after 12 months. The account is open to UK residents aged 16 or over who already have a Nationwide current account.
Unlike many regular savings accounts, this option provides more flexibility by allowing up to three penalty-free withdrawals.
However, making a fourth withdrawal will reduce the interest rate to 1.5 per cent, reports the Express.
"With more bank rate reductions expected this year, those who want to preserve their return must act fast by securing the best deal possible while interest rates remain on the higher side," Alice Haine, personal finance expert at Bestinvest by Evelyn Partners, explained.
"This is imperative for anyone with money idling in a current account or an old savings account offering a poor return, which is being slowly eroded by inflation.
"Worse still, when savers consider their post-tax net return, they may find their cash is being eroded even faster than they feared."
But are there other options available? Well, savers can invest up to £200 per month, allowing the pot to grow to a total of £1,200, and withdrawals are not allowed 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.
First Direct closely follows with a tempting seven per cent AER over a year, permitting depositors to stash away £300 monthly, totalling an impressive £3,600 across the twelve months.
By the end of this period, savers would pocket £3,736.50, with £136.50 earned as interest.
Despite First Direct's lower rate, their extended term and more generous limit on deposits could prove a more fruitful choice for building greater savings pots.
With Bank of England Base Rate cuts looming, savers are being encouraged to pounce quickly to catch these prime rates before they recede.
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