Current accounts that return more in interest than standard savings accounts are helping the Nationwide Building Society to attract 1,000 new customers every day.
Nationwide, Britain’s biggest building society, says that over 365,000 current accounts were opened over the past year - almost double the number from the previous year.
This has taken the society’s current account total to over five million, though this still constitutes less than 6% of the whole market.
Chris Rhodes, Executive Director of Group Marketing at the Nationwide, said that many of those joining the society had switched their bank accounts from another provider – a trend that could gather pace from September when new rules require banks to switch accounts more quickly.
Fed-up consumers have turned their backs on scandal-struck banks in recent months, which has benefited customer-centric "challengers" such as Metro Bank .
Metro, which opened a drive-through branch in Slough earlier this month, said it had attracted close to 180,000 customers through its 18 branches, based solely in Greater London and its surrounding counties.
“Dissatisfaction with the big banks is leading people to vote with their feet,” Mr Rhodes said.
Dissatisfaction is driving people away from scandal-struck banks, says Nationwide Executive Director, Chris Rhodes.
FlexDirect and FlexPlus: The New Products
Nationwide’s resurgence has been assisted by the launch of its first new current accounts since the 1980s.
The FlexDirect account, launched in November, offers 5% interest on credit balances up to £2,500 for the first twelve months – more than twice the amount available through any other standard instant-access savings account.
Our update in March revealed that this account offered the best returns for balances up to £4,167 (read more). This is currently superseded by the Halifax, which is offering a £100 switch bonus alongside its £5 monthly incentive until July.
The FlexPlus account became the Nationwide’s first packaged account when it launched in March.
For £10 per month, account holders can earn 3% on balances up to £2,500, while also receiving benefits including worldwide travel insurance, worldwide mobile phone insurance, and European-wide breakdown cover.
(Read our full review of the FlexPlus account here.)
Nationwide's new interest-paying current accounts are attracting over 1,000 new customers every day.
Property Performance
The society announced yesterday that its share of the mortgage market had reached a record high of 15.1%, following a 17% rise in its gross mortgage lending in the year to 4 April.
Headline profits at the retail arm rose by more than half, to £475 million. However, the society has had to double its provisions for bad loans on commercial property to £493 million.
It attributed this to persistent "negative sentiment toward commercial real estate" and "uncertainty surrounding the economic outlook in the UK."
Interested in a Nationwide current account? Find out more at Which4U's current account page.
Keith McDonald
Which4U Editor
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