The building society has increased the in-credit interest from 2% to 5% AER (4.89% gross) for new account customers from today, but the rate is only available on up to £1,500 for the first 12 months.

After 12 months, the account pays 0.25% AER (0.24% gross) variable. It can be opened online or in branch and customers will need to pay in £1,000 per month which doesn’t include transfers from other Nationwide accounts or Visa credits.

For completely new customers switching to Nationwide via the Current Account Switching Service (CASS), they will receive £100. For existing Nationwide members who switch their current account to it, they will receive £125.

Overall, switchers to the FlexDirect current account can receive up to £200 in the first year through interest and the cash switch incentive.

Further, the account offers an interest-free overdraft for the first 12 months (39.9% EAR variable after 12 months).

If you’re already a FlexDirect current account customer, you will continue to receive 2% in-credit interest. And if you’ve previously held a FlexDirect account, you won’t be eligible for the new, higher rate. But if you previously held a sole account, you would be eligible for the 5% rate on a joint account and vice versa.

Debbie Crosbie, chief executive at Nationwide Building Society, said: “Being able to offer highly competitive rates is one of the biggest benefits of mutuality. This market leading rate will help new and existing members make the most of their money, which is particularly important right now.

“The FlexDirect current account also has an introductory interest-free overdraft to give some peace of mind to those struggling financially and freeing them to focus on repaying other debts.”

In the last financial year, 604,000 people switched to Nationwide – a record for the mutual.