A MAJOR high-street bank has launched a new current account with a market-leading easy-access savings account.
The move comes as firms continue to battle it out to offer customers the best savings rates.
Customers can save as little as £1 to open the new top-rate saver[/caption]
Santander is offering new ‘Santander Edge’ current account customers 4% interest on balances up to £4,000 in a brand new easy-access linked savings account.
It would mean that if a customer saved £1,000 annually, they’d expect to gain £40 over 12 months.
New customers will also get up to £20 in cashback on everyday spending.
Customers will get 1% cash back on debit card spending on transport and groceries – capped at £10 a month.
READ MORE IN MONEY
Account holders will earn cashback on their debit card purchases at:
- Service stations and UK petrol stations
- Automated fuel dispensers
- Suburban and local commuter passenger transport including ferries
- Passenger rail journeys
- Bus journeys
- Electric vehicle charging points
- Supermarkets and grocery stores
- Convenience stores
- Food markets
- Speciality food stores
- Vending machines
Customers will also get 1% cashback on household bills paid via direct debit – also capped at £10 a month. These include:
- Council Tax bills (including Rates in Northern Ireland)
- Gas and electricity bills
- Water bills
- Mobile and home phone bills, broadband and paid-for TV packages
Most read in Money
But there’s a catch and to take advantage of the cashback offers with the new current account, as well as its linked saver, customers will need to foot a £3 a month fee.
You should factor in this fee before you decide whether the account is right for you.
You will also have to pay a minimum of £500 is paid into your account every month and at least two active direct debits.
The savings account is linked to the new Santander Edge current account so customers of other banks will need to switch or open up a new account with Santander.
Rachel Springall, finance expert at MoneyFacts said: “It’s exciting to see such a rewarding current account launched onto the market at a time when many consumers will be trying to make their money go further.
“The Santander Edge current account may well entice consumers that want to earn cashback on their household bills and essential spending, but also, wish to stimulate their savings habit and earn some decent interest on an account that offers them complete flexibility.”
Andrew Hagger, personal finance expert and founder of MoneyComms: “It looks like a pretty decent deal – 4% on easy access is excellent on the first £4,000.
“But customers will need to make sure that they don’t keep any more than that in the account because they’ll earn nothing above £4,000.”
If you are looking to save more than £4,000 and are willing to lock some of your savings away you could get even bigger returns.
Atom Bank offers 4.35% interest on balances above £50 in a one-year fixed bond, while Hampshire Trust Bank offers savers 4.7% interest back on all balances above £1.
But if you’re less interested in the linked savings account or cashback on offer by Santander but still want to switch to another current account check what other banks are offering.
Customers that use the current account switching service and opt to open a Nationwide FlexDirect account will get £200 in free cash paid into their new account within 10 days of opening.
HSBC is also paying new Advance customers £200 in free cash to switch current account.
And First Direct pays new 1st Account customers £175 in cash.
But remember, free cash shouldn’t be the single switching draw and if you’d benefit more from other account perks it’s best to go the other way.
For example, if you’re a frequent traveller, Nationwide FlexPlus account holders get £500 travel, mobile and breakdown cover for just £13 a month.
How do I switch bank account?
It’s easy to switch your bank account using the Current Account Switch Service (CASS).
You don’t have to remember to move direct debits over when moving as it does this everything for you.
All you have to do is apply for the new account you want and the new bank will let your existing provider know you’re moving.
There are some steps you can take before switching though, such as choosing your switch date, or organising transferring your old bank statements to your new account.
To get your old statements you should get in touch with your bank.
How to find the best bank accounts
With your current rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Read More on The Sun
These sites let you tailor your searches to an account type that suits you.