Nationwide’s Champion Saver account is a branch based 60 day notice savings account which promises savers a consistently competitive rate of interest.
It does this by paying the average of the top five branch based instant access, limited access and notice savings accounts offered by eight high street rivals: Barclays, Halifax, HSBC, Lloyds TSB, Natwest, Northern Rock, Royal Bank of Scotland and Santander.
Only one account per bank can be used when calculating the average, so you could lose out if one bank has particularly competitive rates on several accounts as only one will be included. A less attractive rate from one of the other banks will then be used to make up the numbers.
The rate is calculated at 9am on the second Monday of each month assuming a balance of £10,000 (using rates compiled by Moneyfacts) and then applies from the first day of the following month. Interest is paid on 31 December each year.
The average rate for June 2010 is 1.71% gross and it had been stuck at 1.59% over the year before then. Nationwide is adding a bonus of 1.10% gross to this until 31 January 2011, so the headline rate being advertised at the time of writing is 2.81% gross.
You’ll need to give 60 days notice to access your money else lose 60 days worth of interest on withdrawals. Subject to losing this interest, you can withdraw up to £500 per day from a cash machine. Otherwise you can draw a cheque of up to £500,000 in branch or pay £20 for an electronic transfer.
Although you only need £1 to open the account Nationwide will pay a rather uncharitable 0.1% gross (at the time of writing) unless your balance exceeds £1,000, when it’ll qualify for the normal rate.
Is this an account worth using? Well, maybe.
On the plus side it should help ensure you don’t fall victim to the common bank/building ploy of gradually reducing rates on a ‘best buy’ account to almost nothing once you’ve become a customer.
However, Nationwide’s Champion Saver account is a poor relation to the Investec High 5 account, now closed to new customers.
By restricting its universe to branch based accounts from just eight high street banks Nationwide is severely limiting the average rate you can expect to receive. Many of the highest rates on the market are paid by other institutions and internet/postal accounts which, coupled with the averaging, means you’ll almost always fall well short of market leading rates. The fact Nationwide is having to pay a 1.1% bonus to make this account look appealing speaks volumes.
You might also find the hassle of a branch account a downside as Internet functionality is limited to viewing your statement online.
Bottom line, the Champion Saver account is not a bad choice if you’re a lazy saver who’s probably earning 0.25% or less on their savings at present. But you could probably do a lot better longer term if you’re prepared to seek out ‘best buys’ and switch when those rates become uncompetitive.