Nationwide Building Society Accounts

This was 2 articles until I realised that you can only have one opinion per category. Luckily I kept a copy of the old e-Savings opinion, which follows this review on using a Nationwide FlexAccount abroad.

FlexAccount Foreign Exchange savings
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I opened a NationWide FlexAccount in conjunction with an e-Savings account. Whilst I'm not particularly impressed with the e-Savings account (see my original 'e-Savings exasperation' article below). I have to say I was pleasantly surprised by how inexpensive it is to withdraw cash with the Debit card abroad. I don't use the account as my main current account so here I'm just opining about the benefits of using the account whilst abroad.

On a recent trip to Luxembourg my friend and I both withdrew 3000 Belgian Francs from an ATM; he was withdrawing from an HSBC current account. On returning to the UK we compared how much we had been charged; him: £47.80, me: £44.94. Such savings don't just occur on cash withdrawals - paying for the hotel I received a ForEx rate 2.7% better than he did.

The reason for these savings: Most current accounts overload the ForEx rate in addition to charging commision on the transaction; the NationWide FlexAccount does not suffer either of these inconveniences. Each cash withdrawal from the HSBC account was subjected to a commission of 1% (£1.50 minimum) and then the FoRex rate was changed (in the banks favour - of course...) by a few percent.

Consider how much you pay during the whole course of you stay abroad, and the savings you get from using the FlexAccount soon add up - in my experience you'll gain roughly 2-3% over most other current accounts. The lack of a minimum commission charge also means that you aren't penalised for withdrawing small amounts of cash - so you can keep less cash on you (assuming there are enough cash machines for this to be convenient).

Apparently NationWide credit cards have a similar lack of charges for foreign currency transactions; be aware that you'll still presumably be charged interest from the date of any cash withdrawals though.

Note that if, like me, your FlexAccount was opened to access an e-Savings account, you'll need to ask for a form to upgrade the cash card which comes as standard to the VISA debit card. This means going into a branch with the completed form and all told the process takes several weeks.

e-Savings account
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I opened a Nationwide e-Savings account, attracted by the high interest rate and the (almost) instant access. The proviso to the instant access claim is because transfers to the FlexAccount take a day (Mon-Sat, as long as the transfer takes place before 17:00); this timescale is not guaranteed.

The interest rate is 5.9% as of 31/3/2001; the base rate at this time was 5.5%. Nationwide haven't yet succumbed to the headline-rate chasing shenanigans favoured by many building societies, so I don't expect this rate to change much other than tracking the Bank of England base rate changes.

The web-interface to the accounts is satisfactory. Access is via a customer number, 6-digit pass code and memorable item (which can be any of the three set up when applying for the account). One thing I liked was that I automatically got access to my CashBuilder account, and so can transfer money between all of my instant access accounts.

Transferring money to other (non-Nationwide) accounts is not trivial, and is of the 'fill in a form, print it out & post it to us' variety. I was surprised that there was a fee for making CHAPS payments to other UK bank accounts. The only free transfers seem to be between your own Nationwide instant accounts - disappointing.

One nice feature I haven't seen before on an internet banking site (I also use the Citibank and Barclays online banking sites) is that you can order Section 352 Certificates of Tax deduction online, right back to the early nineties.

Overall I'm not that impressed by the online facilities offered by the e-Savings/FlexAccount combination. The fees for simple online transfers mean I probably will not be using the FlexAccount as my main current account - I'll stick to Citibank/Barclays.

I opened the e-Savings because I have been a member of the Nationwide for nearly 10 years and was seeking a better interest rate for my instant access account. The application process takes an age and seems complex and illogical (see section below on my experiences).

At the time of writing several online current accounts (e.g. Abbey National's Cahoot with no chequebook) offer better interest rates, leading one to wonder why Nationwide provide the extra complication of having to deal with two accounts. Oh, and would be carpetbaggers beware - there is the normal charitable clause in the small print.

The Great e-Savings Application fiasco
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I initially applied online to open an e-Savings account with Nationwide at the end of February 2001. I simultaneously applied for the FlexAccount required to transact with the e-Savings account. After a few weeks and a visit to my local branch to confirm my id I received a flurry of letters telling me that my e-Savings and FlexAccount was open.

Great! I tried to logon but soon realised I was not yet in possession of the vital pass code needed to access my accounts online. I waited... and waited. Nothing happened. I received a statement for my FlexAccount showing no transactions (unsurprisingly). I also received a PIN number for a cash card; no accompanying card though...

Being a glutton for this online stuff, I didn't give in and phone the help line; oh no, I went back to the website. I had a plan: I re-registered the FlexAccount for online banking - the same FlexAccount I had applied for online as part of my e-Savings account. This nudged the Nationwide e-banking lethiathon into action; by return of post I had my pass code. Hooray!

The first thing I did once successfully logged into my account (Two months after the initial online application) was to send a secure e-mail to the e-banking beast. I told it of my tribulations on getting to this stage, of my re-registration saga. It listened and dispatched a human underling to answer my queries.

I asked:

- why did I have to re-register my FlexAccount for internet banking, especially as it was only opened to access an e-Savings account that can only be accessed via the internet?

The reply:

- an account has to be open for a few days before it can be registered for internet banking. Accounts are not automatically registered, as not all customers want to use internet banking.

The response didn't answer my original question. Never mind. I pursued the whereabouts my cashcard and was told it had been sent out. Another card was sent, which I have received.

I also asked how I could get a combined debit/cash card and was sent a form to fill in and take to any branch; that's no problem for me as I live in London, but I could imagine it might cause problems for people who don't have a local branch (maybe you can just post it, but I was specifically told to take it to a branch).