Savers feel the squeeze as rates drift and bills bite, yet a handful of headline accounts still dangle rare value.
Regular savers are back in the spotlight as providers duel for your monthly spare cash. Nationwide has stepped in with a 6.5% AER account that tries to balance flexibility and yield, while rivals pitch higher headline rates with tighter rules. Here’s how the offers compare, what you give up, and how to squeeze the most from them.
What Nationwide is putting on the table
Nationwide Building Society’s Flex Regular Saver pays 6.5% AER variable. You can start with £1. You can pay in up to £200 each month for 12 months. Interest posts on the anniversary. Fund every month and you’ll deposit £2,400 in a year. At today’s rate, that produces roughly £84.50 in interest.
6.5% AER on up to £200 a month, three penalty‑free withdrawals, then a drop to 1.25% if you make a fourth.
The account sits inside Nationwide’s current account ecosystem. You must live in the UK, be at least 16, and hold a Nationwide current account to qualify. Nationwide frames this as a regular saver with breathing room: you can take money out up to three times without a penalty. Use a fourth withdrawal and the rate falls to 1.25% for the rest of the term.
Eligibility and access
- Age and residence: UK residents aged 16+
- Relationship: must hold a Nationwide current account
- Funding: maximum £200 per calendar month; minimum opening £1
- Interest: paid on the anniversary; variable rate
- Access: three withdrawals allowed without a penalty; the fourth triggers a rate cut to 1.25%
How the numbers stack up
With the Bank of England Base Rate at 4%, headline regular savers still pay more. Some rivals advertise higher AERs, but term length, withdrawal rules and monthly caps decide your actual return. Here’s a snapshot using the maximum permitted monthly funding for each account at current published figures.
| Provider | AER | Term | Monthly limit | Withdrawals | Estimated interest on max funding |
|---|---|---|---|---|---|
| Nationwide Flex Regular Saver | 6.5% variable | 12 months | £200 | 3 without penalty, then rate falls to 1.25% | ~£84.50 on £2,400 total |
| Principality Building Society Regular Saver | 7.5% fixed | 6 months | £200 | No withdrawals until maturity | ~£27.53 on £1,200 total |
| Zopa Regular Saver | 7.1% AER | 12 months | £300 | Penalty‑free withdrawals allowed | ~£137 on £3,600 total |
| First Direct Regular Saver | 7.0% AER | 12 months | £300 | Typically locked until maturity | ~£136.50 on £3,600 total |
These figures assume you fund the maximum every month, with interest calculated daily and paid at the end of the term. Rates are variable unless marked fixed and can change. Your actual return depends on timing and behaviour.
Where this beats the pack—and where it doesn’t
Nationwide’s 6.5% does not top the league on rate alone. Yet it mixes a solid yield with rare flexibility. Three free withdrawals protect you when life gets messy. That matters if you don’t hold a large emergency fund. Lock‑tight rivals demand discipline in exchange for a slightly higher headline rate. Break the rules and you lose access, or you earn a much lower rate.
The monthly cap shapes your outcome more than the AER in many cases. A 7.5% account that runs only six months, with £200 a month, can’t earn more than around £27.50. Nationwide’s lower AER but year‑long runway and the same £200 cap delivers more cash in pounds. Zopa and First Direct allow £300 a month, so the pot and the pounds of interest grow faster, though rules differ on access.
Don’t chase the biggest percentage blindly. The monthly cap, the term length and the access rules decide how much you actually pocket.
Three ways to use it
- Build the first layer of your emergency fund: feed £200 a month until you hit a target, using the free withdrawals only if you must.
- Plan for a near‑term bill: car insurance, a boiler service or Christmas spend. Set the date and let the anniversary payout land in time.
- Run a ladder: open one flexible regular saver for access and one stricter, higher‑rate option for extra yield. Split your monthly budget between them.
What to watch for before you apply
- Variable means variable: providers can change rates. Keep an eye on app notifications and statements.
- No carry‑over on most regular savers: miss a month and you usually can’t make it up later. Set a standing order to hit the cap.
- Withdrawal trigger: the fourth withdrawal on Nationwide drops your rate to 1.25% for the rest of the term. Track each tap of the pot.
- End‑of‑term drift: many regular savers roll into lower‑paying accounts at maturity. Set a diary reminder to move the money.
- Eligibility hoops: some providers require a current account. A few charge fees or set minimum activity. Weigh perks against any cost.
Tax, protection and timing
Most people will keep the interest here within their Personal Savings Allowance. Basic‑rate taxpayers can earn up to £1,000 of interest tax‑free each year. Higher‑rate taxpayers get £500. Additional‑rate taxpayers have no allowance. Add up interest across all your accounts to check your position. If you sit near the limit, consider cash ISAs for tax‑free growth.
Cash held with Nationwide, Principality, First Direct and Zopa sits under the Financial Services Compensation Scheme up to £85,000 per person, per banking group. Watch for brand groupings when you spread money around.
Base Rate sits at 4%. Providers can tweak savings rates quickly when funding costs shift. Regular savers often act as customer‑loyalty tools, so they stay punchy even as easy‑access accounts drift. Use them to anchor your routine saving while you shop around for a strong easy‑access home for your larger buffer.
A quick test: which account fits your month?
If you value flexibility and you can only spare £200 each month, Nationwide’s 6.5% looks competitive on pounds of interest. If you can stretch to £300, a 7%‑plus twelve‑month regular saver can produce more interest, provided you accept tighter access. If you need the cash in under six months, a six‑month account at 7.5% may suit a short goal, but the absolute payout will stay modest because the term is short.
Match the account to your behaviour: steady monthly saving, limited withdrawals, a clear end date and a plan for what happens next.
Practical example
Say you can save £200 a month for a year and you want access in emergencies. With Nationwide, you would place £2,400 over 12 months and earn roughly £84.50 if you avoid a fourth withdrawal. Need to take cash out twice across the year? The rate holds. If you expect no withdrawals and can manage £300 a month, First Direct or Zopa could deliver around £136–£137 on £3,600, but check access terms and any account requirements first.
If you build a £1,000 emergency fund in five months, you could then redirect payments to a higher‑rate, stricter account for the remaining seven months. This blends resilience with return and keeps you from tripping withdrawal penalties.
This actually makes sense — £200 cap and a full year means more pounds than a 7.5% six-monther. The three free withdrawals are clutch if life gets messy. I’ll definitley set a standing order and test it.
Isn’t the 1.25% cliff after the fourth withdrawal a gotcha? Feels like one slip and you nuke the yield.