Santander has launched a new savings account with interest rates of 2.5%.
The high street banking giant’s new account only needs £1 to activate and acts as one of the best regular savings accounts for consumers currently on the market. The bank’s new 123 Regular e-Saver will be available to new and existing customers from tomorrow – April 6.
The new account will offer people 2.5% AER/Gross interest for 12 months and through the 123 Regular e-Saver, consumers will be able to access their account online or through Santander’s dedicated banking app. It will be fully accessible to those who are already 123, Privé and Sélect current account customers and who are 16 years of age or older.
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All funds must be paid into the savings account via a standing order from an existing Santander 123, Select or Private current account. Bank customers will be able to transfer up to £200 a month into Santander’s latest savings offer.
It should be noted that any money paid into the account and then withdrawn from it will go towards the £200 monthly limit.
Overall, this £200 monthly threshold means savers will see a maximum balance of £2,400 per year. Towards the end of the 12-month period, the balance, including accrued interest, will be returned to the current account of the bank from which the standing order was paid.
However, if the saver’s standing order is in place when the regular eSaver expires, the final account balance and interest will be transferred to an Everyday Saver account. Customers who currently have a regular e-Saver account will automatically benefit from the new rate of 2.5% on all new savings. These savings must be deposited after their account matures at the end of their current 12-month term.
As it stands, the regular Santander e-Saver, number 13, has an interest rate of 0.5% AER/gross for 12 months. Regular customers of the bank’s e-savers will switch immediately after 12 months to the rate available at that time.
This rate is expected to be 2.5% from April 6, 2022, but will be subject to changes and mitigating factors. Hetal Parmar, head of banking and savings at Santander UK, explained why the financial institution was raising interest rates on some of its savings products.
In addition to these changes to the bank’s savings accounts, Santander will launch a brand new e-saver tomorrow. Reflecting the bank’s recent announcement, this new product will have an interest rate of 2.5% for all customers.
Mr Parmar said: “We understand that saving for the future remains important to many customers, and following the recent interest rate increase on our 123 checking account, we are pleased to offer even more value to 123 World customers with our new Regular e-Savers.”
UK residents aged 16 or over can open this particular account with Santander for just £1. Due to the rising cost of living, the bank hopes its latest rate hikes will entice more customers to do business and save with the bank.