The National Building Society is giving its members a one in 1,750 chance of winning a cash prize of up to £ 100,000 each month in a draw which it says has demonstrated ‘the benefits of mutuality’.
The UK’s largest construction company said from September it would give adult savers and mortgage borrowers the chance to win prizes from a pot of £ 1million each month.
There will be 8,008 prizes on offer, most set at £ 100, but five winners will receive £ 10,000, two will receive £ 25,000 and one per month will win £ 100,000.
This is not the first raffle offered by the company – it has organized others intended only for savers. Other providers also have contests, with cash prizes available to winners, and of course, premium bonds offer savers the chance to win up to £ 1million each month.
Anna Bowes, co-founder of Savings Champion, which helps savers find the best deals, said providers were looking for ways to attract some of the £ 238 billion that went into the accounts last year .
“The problem is, as we have become a nation of savers, interest rates have continued to fall,” she said.
“Even on the best savings accounts, the rates are so low that potential savers aren’t as motivated by the rates on offer. A contest or a raffle is therefore a good way to arouse the interest of savers.
In the new raffle, Nationwide members will get entry regardless of the number of accounts they have with the company, and Louise Prior, its director of membership proposals, said it underscores “ethics. of all members being treated equally “.
A total of 14.2 million members in England, Scotland and Wales will be eligible. The rules for the raffles in Northern Ireland mean it will not be offered there, and instead a £ 300,000 fund will be donated to local charities.
The company said that if it had used the prize fund to increase the interest of its savers, it would have resulted in a rate hike of 0.01%, while the first price offered could make a “significant difference” for one. individual member.
“Members don’t have to do anything to participate – as long as they have at least one of our mortgage, savings or checking accounts, they’re automatically enrolled,” Prior said.
“We understand, however, that there may be members who do not wish to participate in our Membership Draw, which is why there will be an unsubscribe page on our website and, by hosting the first draw. comes out in September, we give members plenty of time and opportunities to do so.
The company has committed to run the draw for one year and will revise it thereafter.
Rival institution Halifax is giving three savers the chance to win £ 100,000 each month and offering 100 prizes of £ 1,000 and 1,500 of £ 100. To be eligible, savers must hold at least £ 5,000 in qualifying accounts. Savers must register to participate, and savings in pooled accounts are treated as evenly divided.
Bowes said Nationwide competitions “often came with a savings account that was also competitive – so a raffle is the icing on the cake.”
She added: “This new sweepstakes is a great way to reward loyalty – although that shouldn’t necessarily be a reason to choose a savings account if you’re not already a member. A competitive interest rate is also important.
Bowes said Nationwide has accounts offering decent rates – she points to the FlexDirect checking account paying 2% for 12 months on balances up to £ 1,500 – although as a checking account, to earn that rate, you need to deposit a minimum of £ 1000 per month.
Nationwide’s Start to Save regular savings account, which pays 1% AER (annual equivalent rate), is only beaten by the Regular Saver of the Coventry Construction Company, who pays 1.05% of AER.
She added, “Nationwide also pays very low rates, so choose carefully to get the best of both worlds. “
Bowes said the Halifax fares mean you might miss out on the best deals for a chance to win a prize.
“As savers continue to suffer from extremely low interest rates, these raffle funds may offer a silver lining – however, it is important to understand that you may very well earn nothing and therefore earn even less. on your hard earned money, ”she added.