NatWest increases interest rate on savings account to 6%

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NatWest customers are now being offered an interest rate of six percent on the bank’s Digital Regular Saver – an increase from five percent. The top rate of interest is paid on balances up to £5,000 and savers will be able to put away up to £150 every month. An estimated one million customers are now being assisted with saving through with the Digital Regular Saver account.

On top of this, NatWest is offering its “highest ever switcher offer” for both new and existing customers.

Those who switch from their main current account to the bank will receive £200 within seven days of meeting the eligibility criteria of logging into mobile banking.

However, eligible customers also need to pay £1,250 into the account in order to qualify for this payment.

Furthermore, customers will also be able to benefit from a new savings prize draw with a top prize of £10,000.

Lewis Broadie, the customer manager at NatWest, shared why the bank is making these deals on offer for customers at this moment in time.

He explained: “We are welcoming customers to the bank with our highest ever switcher offer of £200.

“Customers will also be able to benefit from a new savings prize draw with top prizes of £10,000 and our Digital Regular Saver account which is increasing to six percent to help encourage a savings habit.

“We hope these incentives will help customers build their financial resilience and support them in managing some of the pressures of the cost-of-living crisis.”

Through the bank’s new savings prize draw, customers can win £10,000 by turning on the NatWest’s Round Ups feature.

This particular service saves the change to the nearest pound every time a transaction is made by someone.

According to NatWest, the prize draw is being launched to help encourage customers to develop a better savings routine.

Overall, there are 33 prizes to be won with the three top prizes being £10,000 and 30 separate £500 prizes up for grabs.

READ MORE: Recession fears continue despite UK economy growing

The bank has confirmed that the saving prize draw will come to a close in two months’ time on April 21, 2023.

This latest decision by NatWest comes amid a wave of interest rate increases from high street banks and building societies.

Financial institutions are following the Bank of England which has raised the country’s base rate ten consecutive times in the last year.

As a result, the base rate is now sitting at four percent which is being partially passed onto savers via NatWest.

However, experts from AJ Bell have been warned there are limits to the central bank’s intervention.

The group stated: “Banks respond to two forces: the Base Rate and competitors. They will use Base Rate as a gauge of whether to raise their savings rates, but of much more importance is what their competitors are doing.

“No bank is going to hike rates dramatically above the highest rival, as they only need to nudge it slightly over their competitor’s offering to win business.

“On top of this, banks are very keen to protect their profits, which comes at a cost to UK households.

“While mortgage rates have shot up, savings rates haven’t risen by nearly as much and some banks are worse than others for pocketing the difference rather than boosting savings rates.

“Banks make money on the difference between what they charge those borrowing money and what they hand over to savers – the bigger the difference, the bigger the profits.”

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