Santander has introduced a new Regular Saver account offering an 8% interest rate, including a 5% bonus for the first 12 months. After the introductory period, the rate drops to 3%. The rates are variable and subject to change.
Account Details and Benefits
Customers can deposit up to £200 per month, allowing a maximum balance of £2,504 after one year including interest, and £5,018 after two years. Withdrawals are permitted without penalties, but funds must be transferred to a Santander current account.
The account is exclusively available to Santander current account holders. New customers switching to Santander using the Current Account Switching Service can receive an additional £180 to save or spend.
Market Comparison
Santander's offering is competitive among regular savers. Zopa pays 7.1% variable for six months on up to £300 monthly. First Direct offers a 7% fixed rate for one year with up to £300 monthly deposits, while Co-op Bank provides 7% on up to £250 monthly.
For easy-access accounts, the best rate is 5%, offered by Revolut (new customers for six months) and Cahoot on up to £3,000. Top one-year fixed rates are 4.81% from StreamBank, and five-year fixed rates reach 4.9% from Afin.
Tax Considerations
Basic-rate taxpayers (20%) can earn up to £1,000 in savings interest tax-free per year under the Personal Savings Allowance. Higher-rate taxpayers (40%) have a £500 allowance, while additional-rate taxpayers (45%) receive none. Those earning below the personal allowance of £12,570 may qualify for a £5,000 starting rate for savings.
João Soares, Head of Savings at Santander UK, stated: “We know customers want savings accounts that are easy to understand, offer a competitive rate and deliver value. That’s why our new Regular Saver rewards customers with a market leading rate, while supporting customers’ who want to build up a habit of saving regularly.”
