Nationwide introduced an 8% account as competition for UK savers heats up.

With Nationwide offering an account earning a "market-leading" 8% interest, banking companies are competing for a larger share of the country's funds.

Since late 2021, the Bank of England has raised interest rates repeatedly, which has increased savings rates everywhere. The Bank decided to maintain interest rates steady on Thursday at 5.25%, which is still much higher than the 0.1% level they were at in November 2021, just before the rate-hike cycle started.

According to the financial data source Moneyfacts, it was critical for savers to "ditch and switch" if their devotion was not being rewarded because some easy-access savings accounts still only give approximately 1% return.

The new offer from Nationwide is a standard savings account that is only accessible to holders of current accounts.

In an additional effort to entice new current account holders, the building society is providing a £200 payout to anyone who switches to it through the switching service.

Customers may deposit up to £200 per month in the online-managed account, which allows up to three withdrawals during a 12-month period and earns 8% interest over the course of the year. The APR on the account will decrease to 2.15% after four withdrawals or more.

First Direct offers a regular savings account that pays 7% and allows customers to deposit between £25 and £300 each month.

These rates are the highest that have been provided for these accounts since they initially went on sale in 2008, and they are accessible to both new and current clients. This indicates that NS&I is still in first place in the savings best-buy rankings for one-year fixed-rate plans several weeks later.

The desire to save money appears to have increased as a result of higher interest rates.

This past week, NatWest reported a "rocketing" increase in the number of consumers opening fixed-rate savings accounts. According to a bank spokeswoman, there are up to 17 times as many new fixed savings accounts being established as there were withdrawals in the first half of 2019.

In addition to a normal savings account that pays 6% interest, NatWest now provides a one-year fixed-rate account with an improved interest rate of 5.56% for balances under £100,000 and 5.6% for balances beyond that amount.

While the 8% is the highest rate relative to Nationwide, it does have some specific requirements. You can only deposit a max value of £200 per month to qualify for the 8% return. Additionally, the money has to be fixed for a period of 12 months but it does allow for up to 3 withdrawals within that period. Four withdrawals or more would result in a 2.15% APR decrease. Therefore, due to these requirements, the earnings can be limited.

However, in the link below we have attached the top regular savings accounts right now. The table within the article demonstrates the various providers, their competitive APRs and the account requirements. 

For more details please visit https://www.minipip.co.uk/news/top-regular-savings-accounts-right-now--september-2023

(Sources: theguardian.com)