Britons, can you turn £200 a month into £84.50 interest at 6.5%? Nationwide vs 7.5% rivals explained

With rates moving and budgets tight, small monthly deposits could work harder than a lump sum this winter.

A new round of regular saver deals puts disciplined savers in pole position. Nationwide has stepped in with a 6.5% AER offer, while rivals pitch punchier headline rates with more strings attached. Here’s what those numbers mean for your wallet, and how to choose the account that fits your life.

What Nationwide is offering

Nationwide Building Society’s Flex Regular Saver pays 6.5% AER to qualifying current account customers aged 16 or over. You can start with £1 and pay in up to £200 each month for 12 months. Interest is added on the account’s anniversary.

Key promise: 6.5% AER on up to £2,400 of monthly contributions, with interest credited annually.

The account gives welcome breathing room. You can take money out up to three times in the year with no penalty. Make a fourth withdrawal, and the rate drops to 1.25% for the rest of the term.

Use up to three withdrawals without a hit to the rate. The fourth triggers a fall to 1.25% AER.

How much could you earn?

Maxing out the £200 monthly limit builds total deposits of £2,400 across a year. At 6.5% AER on a rising balance, Nationwide estimates interest of about £84.50 over 12 months. That works because each monthly payment earns for less than a full year, so the interest figure sits well below 6.5% of £2,400.

• Monthly deposit limit: £200
• Total you can pay in over 12 months: £2,400
• Estimated interest at 6.5% AER: about £84.50
• Access: up to 3 withdrawals at the full rate; the 4th cuts the rate to 1.25%
• Eligibility: UK resident, 16+, holding a Nationwide current account

How the returns stack up

Several providers are vying for your monthly savings. Some headline rates exceed Nationwide’s 6.5% AER, but term length, withdrawal rules and monthly caps shift the real-life outcome.

Despite the Bank Rate sitting at 4%, these regular saver offers still deliver higher returns than many easy access accounts because the providers cap funding and shape how and when you can touch the cash.

Worked example: £200 a month with Nationwide

Imagine you set a standing order for £200 on the 1st of each month. Your first £200 earns close to a full year of interest; the last month’s £200 earns roughly a month. That staggered effect is why a 6.5% AER headline produces around £84.50 of interest rather than £156. Over the year, your closing balance would sit near £2,484.50.

Regular savers reward habit. The earlier in the month you pay in, the more each instalment earns.

Who can apply and the small print

To open Nationwide’s Flex Regular Saver, you must hold a Nationwide current account and live in the UK. The minimum opening deposit is £1. You can vary monthly payments up to £200, skip a month if needed, and still stay within the rules.

The account pays interest on the anniversary date and then usually rolls into a more flexible account with a different rate. Many savers diarise the anniversary to move funds if the follow‑on rate disappoints.

Alternatives competing for your cash

Principality’s punchy 7.5% AER, but only for six months

Principality Building Society leads the table on rate but limits the term to six months and blocks withdrawals. Fund £200 each month and you’ll deposit £1,200. The shorter window caps interest at about £27.53. That’s still a tidy sum for half a year, especially if you value a fixed end date.

Zopa at 7.1% AER with flexibility

Zopa’s version lifts the monthly cap to £300, lets you withdraw without penalties and runs for a full year. Max funding of £3,600 can generate roughly £137 in interest, with the lot credited at the end of 12 months.

First Direct at 7% AER for steady savers

First Direct offers 7% AER over 12 months and allows up to £300 each month. A saver hitting every monthly limit would end near £3,736.50, including about £136.50 in interest. Check its access rules before locking in your plan.

Tax, access and strategy

For many workers, interest from regular savers falls within the Personal Savings Allowance. Basic‑rate taxpayers can earn up to £1,000 of interest tax‑free each tax year; higher‑rate taxpayers get £500; additional‑rate taxpayers have no allowance. If you already use your allowance, consider whether a cash ISA suits your needs, accepting that ISA regular savers may pay lower rates.

Your emergency cash should sit where you can reach it quickly. Nationwide’s three penalty‑free withdrawals will suit many households juggling uneven bills. If your budget is fragile and you expect frequent dips into savings, a penalty‑free provider such as Zopa may prove calmer to live with. If you rarely touch your pot, a stricter high‑rate option like Principality can pay more on a shorter runway.

Practical tips to squeeze more from these accounts

• Pay in early each month to maximise days in interest.
• Use a standing order so you never miss the monthly window.
• Keep a separate buffer in easy access to avoid a fourth withdrawal with Nationwide.
• Set a calendar reminder a fortnight before maturity to plan the next move.
• Consider pairing: regular saver for rate, easy access for emergencies.

A quick simulation you can copy

Pick your monthly spare cash. If you can spare £150 instead of £200 with Nationwide, you’ll deposit £1,800 over the year. Scale the earlier estimate by three‑quarters, and you get interest near £63. Pay on the same date each month to keep the pattern predictable. If you receive a bonus, park the excess in a linked easy access account rather than breaching the monthly cap.

Set the pace you can keep. £100 a month is still £1,200 saved, plus interest, by this time next year.

Rates can change, and providers can pull issues once funding targets are hit. Check eligibility, monthly caps and the follow‑on rate before you commit. If you need flexibility, protect it; if you want the last ounce of return, accept tighter rules and plan ahead.