Nationwide launches 6.5% savings account, but what’s the catch?

Nationwide has grabbed headlines with the launch of its Flex Regular Saver, offering a headline rate of 6.5% AER, one of the highest rates currently available in the UK. But before savers rush to sign up, it’s worth asking: is it really 6.5% across all your savings, and what are the conditions?

The short answer is no. The account comes with several restrictions that mean most people won’t be able to deposit large sums and simply collect 6.5% on their balance. Instead, customers are limited to saving a maximum of £200 per month, or £2,400 over a year. To qualify for the rate, you also need to have an existing Nationwide current account, be 16 or over, and manage the account exclusively online.

Withdrawals are another catch. You can make up to three withdrawals in a 12-month term and still earn 6.5%. Make a fourth, however, and the rate drops sharply to just 1.05% for the rest of the year. Interest is paid at the end of the term, not monthly, and the rate is variable, meaning it could be cut during the year.

How does that compare with a simpler, no-strings account?

Nationwide provides an illustration: if you save the maximum £200 each month, you’ll have £2,400 deposited after 12 months. At 6.5%, that earns £84.50 in interest, bringing the total to £2,484.50.

Suppose you put the same £2,400 into a standard easy-access savings account paying 4% (the current Bank of England base rate). Over a year, you’d earn around £96 in interest. In other words, despite the higher headline rate, the limited deposit allowance means the Nationwide account could actually deliver less total interest than a lower-rate but unrestricted account.

The main attraction is the discipline of regular saving. For those who want to drip-feed money each month and don’t plan to make withdrawals, the 6.5% rate is competitive. But for lump-sum savers, or those who may need flexibility, other accounts may offer better overall returns.

As Michael Healy, Nationwide’s UK managing director, noted in announcing the product, the aim is to encourage members to build a regular savings habit. Yet the lesson is clear: always look past the headline rate and check the terms. With restrictions on monthly deposits, withdrawal penalties, and variable rates, the real returns may be less generous than the marketing suggests.

Customer reviews of Nationwide on Good Money Guide suggest that many Nationwide members value more than just headline rates. Savers consistently highlight the building society’s customer service, competitive products, and commitment to keeping branches open at a time when many rivals are closing local offices. While some describe its savings as “very competitive” and “easy to open and apply for,” others stress the reassurance of dealing with a trusted, dependable brand.

For many, Nationwide’s appeal lies in a combination of fair rates and strong service, rather than short-term offers alone.