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Nationwide to axe 5% regular savings account on Friday

Nationwide to axe 5% regular savings account on Friday

Nationwide Building Society is to close applications for its 5% regular savings account. If you're a Nationwide current account holder and wish to open one, you must do so before 11.59pm on Friday 5 April.

Savers seeking a hefty return on their cash will find it more difficult from Friday, following Nationwide's decision to pull the plug on the Flexclusive Regular Online Saver.

The account currently pays 5% AER variable interest and allows you to save up to £250 each month – meaning you can earn up to £80.64 interest a year (assuming you don't pay tax on your savings).

The account is available to those with a Nationwide FlexOne, FlexStudent, FlexGraduate, FlexDirect or FlexPlus current account. You can also get it if you've its basic FlexAccount, as long as you've paid in £750 a month over the past three months or have switched to it in the past four months.

Today's announcement doesn't affect existing customers. Those who already have the account – or those who open one before the deadline – can continue to save into it until the maturity date, which will be 12 months from opening or renewing the regular saver.

For more ways to earn 5% on your savings, including accounts from HSBC and First Direct, see our Regular Savings Accounts guide.

What is a regular savings account?

Regular savings accounts are usually linked to current accounts and many offer headline interest rates of up to 5% AER.

While the interest rates offered smash those available on normal savings accounts, they only allow you to save a certain amount of money each month – so if you've a lump sum, you must drip-feed in cash to maximise returns.

Most regular savings accounts last a year or so before they mature.

What does Nationwide say?

A spokesperson for Nationwide said the regular saver isn't reaching its intended market. 

She said: "The [regular savings] account was launched to help members new to saving get into the savings habit. However, the significant majority (86%) are opened by existing savers and, on average, members with the account have around £20,000 saved with Nationwide in other accounts."