Santander has launched a new savings account, the Edge account, which could provide customers with up to £608 per year in combined benefits, including interest, cashback, and a switching incentive. The account is designed to appeal to both new and existing customers seeking to maximise their savings.
Interest Rates and Switch Bonus
The Edge account offers a standard interest rate of 3.5% (3.45% gross). However, new customers benefit from an enhanced rate of 6% for the first 12 months on balances up to £4,000. For example, depositing £1,000 over a year would yield an extra £60 in interest, while depositing the maximum £4,000 would result in £240 in interest after one year.
In addition to the interest, Santander is offering a £180 switching incentive for customers who move their current account to Santander. This incentive is available to new customers who switch using the Current Account Switch Service.
Combining with Regular Saver for Higher Returns
Kate Steere, personal finance expert at comparison site Finder, recommends combining the Edge account with Santander's newly launched Regular Saver, which offers an 8% interest rate for the first 12 months. Customers can deposit up to £200 per month into this account. 'If you also open the new Regular Saver, which earns 8% AER for the first 12 months, and deposit the maximum of £200 per month, you can earn £104 in interest,' she explains.
Furthermore, the Edge account provides 1% cashback on household bills, capped at £10 per month, equating to a maximum of £120 over the year. This cashback is automatically applied to eligible direct debits.
Total Potential Earnings and Fees
When all benefits are combined, the potential earnings are substantial: £180 switch incentive, £240 interest on the Edge account (with £4,000 deposited), £120 cashback, and £104 interest from the Regular Saver, totalling £644. However, the Edge account carries a monthly fee of £3, which reduces the annual total by £36, resulting in a net benefit of £608 per year.
It's important to note that the £3 monthly fee is waived for the first three months for new customers, but thereafter it applies. Customers should ensure they meet the conditions for the Regular Saver and cashback to maximise returns.
Comparison with Other Bank Switching Incentives
Santander's £180 switch incentive is competitive but not the highest on the market. Other UK banks offer varying amounts: HSBC offers £220, Barclays and NatWest each offer £200, Lloyds offers £200 for Club Lloyds and £500 for Lloyds Premier. These incentives are often referred to by financial expert Martin Lewis as 'legal bribes' to encourage customers to switch.
The Edge account's combination of a competitive interest rate, cashback, and a regular saver option makes it a compelling choice for savers looking to maximise their earnings with minimal effort. However, customers should consider the monthly fee and ensure they can meet the deposit requirements to fully benefit.
