Written by Karen Bryan
I’m not a great fan of premium current accounts, where you pay a monthly fee in order to receive benefits; usually various types of insurance. I’d prefer a pick and mix approach, allowing customer to select the products that best suit their needs. However, when I was researching the Nationwide Flex Direct current account, I noticed that there’s also a Nationwide Flex Plus current account.
The Nationwide Flex current account charges £10 a month and includes annual travel insurance, mobile phone insurance, UK & European breakdown cover and a 12 month warranty extension on electrical goods. You also get fee-free overseas ATM withdrawals.
It’s hard to work out the value of these benefits. We get annual travel insurance as part of our Direct Line Home Insurance Plus and UK & European Breakdown cover is included in our Marks and Spencer Premier Car Insurance. I try to be very careful with my mobile phone and have never lost one or had one stolen, plus I use basic smart phones which cost around £100. I get a 12 month warranty extension with my BarclayCard World Mastercard, which is not very useful, as you have to get a quote for repairs before you can claim.
Part of the Nationwide Flex Plus £120 a year charge can be offset if you keep a balance of £2,500 in the account, which pays a 3% variable rate of interest. That would earn you £75 a year gross (£60 net after deduction of 20% basic rate income tax). The highest rate of interest you could get on an instant access account is around 1.7% which would earn £42.50 gross interest (£34 after deduction of basic rate income tax). The additional net interest earned would equate to reducing the annual fee on the Nationwide Flex Plus current account to £84.
Nationwide Flex Plus account holders have access to some exclusive product deals, e.g. personal loans at a lower rate of interest. This could possibly save you money, but you’d have to compare the exclusive products with what was on offer from other financial institutions.
I doesn’t appear that the Nationwide Flex Plus current account is very suitable for our needs, but the additional benefits might offer value for money for some customers.
Update 15 January 2015 – I have now opened a Nationwide Flex Plus account. My reasons are:
- I spent £240 on a Sony Xperia Z Ultra phablet, which I wanted to insure.
- I wanted to have the comprehensive travel insurance cover offered on this current account. When I went to Chicago with our son last September, the Direct Line travel insurance didn’t cover us for possible ash cloud delays.
- We had to replace two kitchen appliances last year, the fridge freezer and washing machine, so I thought that the 12 month warranty extension would be a good thing to have.