Santander’s new savings account will get you 8% interest

Santander have launched a new savings account with an attention-grabbing 8 per cent interest – the best on the market of its kind by a distance.

It’s not your usual easy-access account though, which means potential customers need to know how to get the best out of the account and whether it suits their needs before heading to open it up.

This type of account is known as a regular saver and is perfect for a couple of situations in particular:

• If you are trying to get in the habit of starting saving and can automate set monthly amounts

• Or, if you have a bit of excess cash after your usual incomings and outgoings and want to put it to work before having a lump sum available in a year.

The regular saver is a new option from the bank to both new and existing clients – you need a Santander current account to get access to it. If you are already with the bank, you should get the choice to open such a new account as usual through the app or online.

For those looking to open a Santander account to gain access, it’s worth noting that you don’t have to switch banks just to open a current account – but if you do, there’s currently a £180 cash switch bonus available to you. Other banks are running similar offers at the moment, up to £220, but always look at the wider details on offer first, including access to higher-interest accounts and whether the current account you must open is a paid one.

For Santander’s regular saver, there are a few important facets to note.

You can save a maximum of £200 per month, and the 8 per cent interest rate lasts for one year. Thereafter it will revert to 3 per cent if you opt to keep going, but make a note of the date in case there’s another top offer out there to start again with. You can make withdrawals, but if you’re trying to save for the first time, try to keep up the saving habit and watch the pot grow.

Other banks offering slightly lower interest rates include Zopa (7.1 per cent), first direct (7 per cent), the Co-operative Bank (7 per cent) and Nationwide/Virgin Money (6.5 per cent). Each will have differences which may suit you, including maximum monthly deposit amount and whether you can make withdrawals, for instance.

If you were to max out the contributions with Santander, after a year you would have £2,400 of your own money, plus £104 in earned interest.

For those looking to start building a savings habit, having over £2,500 in a pot at the end of the first year could be a notable step forward in building their financial resilience and in creating a meaningful emergency savings buffer.

Or, if you already have savings and just wanted to take advantage of the high rate for some spare cash, it’s a decent amount to add to an ISA or put towards a planned big purchase in a year’s time.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Santander has shot to the top of the market with its incredibly eye-catching offer for those looking to gradually build their savings pot.

“It is never too late for consumers to start putting some cash aside for any future goals, as those who save little and often can feel more in charge of their financial wellbeing. Building an emergency fund or saving for a specific goal is simple and easy to do and there are plenty of accounts designed for various needs. Regular savings accounts are ideal for slowly building a pot as they encourage the savings habit.”

On the wider options Santander are offering right now, Kate Steere, personal finance expert at comparison site Finder, added:

“Santander is currently running a bundle of tempting offers to attract new customers, which could see you earn up to £608 in a year if you open the Edge account, between the £180 switch incentive, the newly launched 8 per cent Regular Saver and cashback on bills.

“The Edge account has a £3 monthly fee, but you get access to its Santander Edge saver at 6 per cent on balances up to £4,000. If you deposit the maximum amount, after a year, you’ll have £240 in interest. There’s also a maximum of £120 over the year in cashback, plus the £104 in interest from the regular saver.”

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