Santander raises savings rate to 5pc

Santander has increased the rate on its Regular eSaver account from 3pc to a joint market-leading rate of 5pc – but it’s available only to certain existing customers.

Only “123 World” customers – those who already have a 123 current account or a 123 credit card – or “Select” customers are being offered the new rate.

To qualify as a Select customer you must pay your main income, of at least £5,000 a month, into a Santander current account, keep £75,000 in a Santander investment, savings or current account or have a property worth at least £500,000 with a Santander mortgage.

The regular saver account allows a maximum deposit of £200 a month for one year, which will generate around £64 in interest. After 12 months the account turns into an Everyday Saver, which pays just 0.1pc. Accounts can be opened online or in a branch and there are no penalties for withdrawals.

Non-123 World or Select customers can open the account but earn 2.5pc.

Santander’s 5pc rate is also offered by Nationwide, First Direct and Marks & Spencer Bank, but on larger sums.

Nationwide’s Flexclusive regular saver pays 5pc and has a monthly limit of £500 – giving savers £161 interest a year on the maximum amount. Withdrawals are permitted but customers must have or open an account in the “Flex” range.

First Direct’s regular saver is only for its current account customers, for which they must deposit £1,000 in six months or pay a £10 monthly fee. The regular saver has a £300 a month deposit limit, so savers could earn £96 in 12 months. Withdrawals are not permitted.

M&S Bank pays 5pc on its regular savings account to existing current account holders. It allows customers to pay in up to £250 a month. Savers could earn £80 in interest a year. Withdrawals are not permitted.

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