Nationwide’s 6.5% saver: could £200 a month really net you £84.50 a year and three free withdrawals?

Budgets are tight and rates are shifting. Yet a handful of regular saver deals still reward steady habits and quick decisions.

Nationwide Building Society has launched a 6.5% AER regular saver that aims squarely at people who pay in monthly and want the option to dip into their cash without wrecking their return.

What Nationwide is offering

The Flex Regular Saver pays 6.5% AER on balances built through monthly contributions. You can start with just £1 and pay in up to £200 a month, so a maximum of £2,400 over 12 months. Interest is added on the account anniversary.

The account is open to UK residents aged 16 or over who already hold a Nationwide current account. People without one would need to open a current account first to be eligible.

6.5% AER, up to £200 a month, three penalty‑free withdrawals. Make a fourth withdrawal and the rate drops to 1.25%.

Key rules at a glance

• Minimum to open: £1
• Maximum monthly deposit: £200 (total £2,400 over 12 months)
• Interest credit: on the anniversary of opening
• Withdrawals: up to three without reducing the rate; a fourth cuts it to 1.25%
• Eligibility: UK residents aged 16+ with a Nationwide current account
• Rate type: variable AER (the provider can change it)

How much interest could you make?

With the maximum £200 paid in each month, the pot reaches £2,400 over a year. On today’s 6.5% AER, the running balance would generate about £84.50 in interest by the anniversary date. That figure reflects the fact that money paid in later in the year earns for fewer months than money paid in at the start.

Pay in less and the return scales down. A £100 monthly habit would produce roughly half that, subject to the exact timing of deposits and any withdrawals.

A standing order early in the month usually squeezes out a little more interest than paying near month‑end.

How it compares with rivals

Savings rates remain punchy despite the Bank Rate now sitting at 4%. Several providers dangle headline AERs above Nationwide’s 6.5%, though the mechanics differ and can limit the total pounds earned.

Nationwide’s hook is flexibility. Three withdrawals offer a safety valve for unexpected bills, which sets it apart from stricter “no access” regular savers. The trade‑off is a slightly lower headline rate than the top tier.

Pros and trade‑offs

• Flexibility: up to three penalty‑free withdrawals preserve the 6.5% rate.
• Access requirement: you need a Nationwide current account to qualify.
• Discipline: the £200 monthly cap encourages steady saving but limits larger deposits.
• Rate risk: the AER is variable, so the provider can change it during the term.
• Behavioural nudge: paying in monthly builds the savings habit and grows an emergency buffer.

Who might this suit?

People building a starter emergency fund often prize access. Nationwide’s three free withdrawals suit that need while giving a rate that beats many easy access accounts. Those chasing the absolute highest AER may lean towards a stricter rival, but the total pounds‑and‑pence gain can prove modest once you factor in lower monthly caps or short terms.

Students, first‑jobbers and households nudging up a rainy‑day pot may find the £1 entry point and £200 ceiling easy to stick with. Savers with larger sums ready today might prefer a separate fixed‑rate bond or a top easy access account for lump sums, then run a regular saver alongside it.

Miss the limit: make a fourth withdrawal and Nationwide cuts the rate to 1.25% for the rest of the term.

What to check before you apply

Existing current account: you must hold one with Nationwide, and some current accounts come with fees or conditions. Weigh any monthly charge against perks you actually use.

Direct debit timing: set your standing order for the start of each month to maximise days in interest. Keep a buffer in your current account to avoid failed payments.

Exit plan: when the 12 months end, the account may switch to a lower paying pot. Put a reminder in your calendar to review and move the cash.

Tax, timing and smart use

Tax position matters. Interest from regular savers counts towards the Personal Savings Allowance: basic‑rate taxpayers have a £1,000 allowance, higher‑rate have £500, and additional‑rate have none. Go past the allowance and HMRC will collect tax through your code or self assessment.

Remember the AER shows the rate with compounding over a year. Because you drip feed money, the effective return in pounds will be far smaller than 6.5% of £2,400. What you earn depends on when you pay in and whether you withdraw.

Worked examples

• Deposit £200 on day one each month for 12 months at 6.5% AER: around £84.50 interest by the anniversary.
• Deposit £150 a month: expect roughly two‑thirds of that, assuming the same schedule and no withdrawals.
• Make two mid‑term withdrawals and replace the money later: your pot grows, but interest slips because cash spent time out of the account.

Ways to squeeze more from regular savers

Build a ladder. Run one or two regular savers alongside an easy access pot. Use the easy access account as a buffer and leave the regular saver untouched unless the emergency is genuine. That helps you avoid the fourth withdrawal trigger that cuts Nationwide’s rate to 1.25%.

Combine with ISAs where suitable. If you are close to using up your Personal Savings Allowance, shifting part of your rainy‑day cash into a cash ISA can shelter interest from tax. ISA rates change frequently, so compare before moving.

Match the product to the job. If you need cast‑iron access, Nationwide’s three‑withdrawal cushion looks appealing. If you can lock funds and want the highest headline rate, a six‑month or one‑year regular saver with no access may edge it on percentage, even if the total interest in pounds is capped by the term or monthly limit.