Nationwide Building Society is set to introduce a £50 interest-free buffer in November, eliminating charges for those who slightly overdraw their accounts.
This will apply to the society’s three main current accounts FlexPlus, FlexDirect and FlexAccount, and the exact launch date will be announced closer to the time.
In addition, Nationwide has unveiled a new offer of £175 for those switching to its current account from Wednesday using the Current Account Switch Service (Cass), subject to terms and conditions. This offer also applies to the FlexDirect, FlexPlus and FlexAccount accounts.
The FlexDirect account offers five percent credit interest on balances up to £1,500 for the first year and has also been providing an interest-free overdraft for the same period. From Wednesday, new FlexDirect account holders will continue to receive the five percent credit interest rate and will also get one percent cashback for the first year on debit card purchases, capped at £5 per month, subject to terms and conditions.
However, the previous interest-free overdraft offer will no longer be available for new FlexDirect account openings. Existing customers currently benefiting from this offer will continue to do so until the end of their 12-month period, according to Nationwide.
Starting from November, eligible FlexDirect customers, as well as those with a FlexPlus or FlexAccount, will be introduced to a new £50 interest-free buffer.
The FlexPlus account comes with a monthly fee for perks such as insurance and breakdown cover. This fee is set to rise from the current £13 to £18 per month in December, while the FlexDirect and FlexAccount remain free of charge.
Finance expert Rachel Springall from Moneyfactscompare.co.uk remarked that the buffer could be useful for some as the festive season approaches.
Ms Springall said: “This safety net can make a difference for those who might overspend by a small amount.”
Addressing the £175 free-cash perk, Ms Springall said the deal is “a joint-market leading sum” with First Direct, adding: “So it will be interesting to see if any other providers launch a switching incentive to compete for business in the weeks ahead.”
She also noted: “The FlexDirect (account) will pay up to £5 per month in cashback, but this is not diluted by any account management fee, which is a plus.”
Additionally, Ms Springall pointed out the TSB’s Spend & Save Plus Account, which has a £3 monthly fee and offers the chance to earn up to £5 in cashback.
She continued: “As an alternative, the Chase Current Account currently pays more cashback on spending, as it will pay one percent, capped up to £15 per month for new customers.”
Ms Springall advised current account holders to carefully assess the benefits they receive and the fees incurred for using their account “to see if it’s working hard enough”.
