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Santander easy-access rate slashed: Alternatives for your cash

Santander easy-access rate slashed: Alternatives for your cash
Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
20/05/2024
Updated:
20/05/2024

Santander customers have seen the rate on their easy-access account slashed from today. Here are alternatives if you’re thinking about chasing a better rate.

The interest rate on Santander’s popular Easy Access Saver Limited Edition (Issue 3) account has fallen from 5.2% AER (variable) to 4.2% AER (variable) as of today, Monday 20 May.

The account is no longer open to new customers, but it was a best buy when it launched in September 2023. It was only on sale for a week before Santander stopped accepting new applications due to high demand. In March this year, it started informing customers about the upcoming rate cut.

At 5.2% AER, the account was still unbeatable on rate in the days leading up to the reduction for anyone with between £1 and £250,000 to save. However, savers need to be mindful of the up-to-£85,000 Financial Services Compensation Scheme (FSCS) protection limit.

Now that the rate has dropped to 4.2% AER, competitors easily beat the banking giant’s offering.

Easy-access competitor accounts

According to Savings Champion data, the current best buy in the easy-access savings category is offered from Oxbury, which can be opened online. Its Easy Access Account Limited Edition 1 pays 5.02% AER (4.91% gross) for those with a minimum deposit of £20,000. If the balance falls below £20,000, no interest will be paid.

Monument Easy Access Savings pays 5.01% AER (4.90% gross), but you need a higher minimum opening balance of £25,000. It can be opened and managed via mobile banking.

If you’ve a lower amount to save, both Raisin and Close Brothers Savings offer 5% AER on a minimum £10,000. Both can be opened online, but with Raisin, the Rainy Day Saver 2024 Easy Access is provided by Paragon Bank via the savings platform.

With this deal, there’s no limit to the number of withdrawals you can make, but you can’t withdraw less than £500 in a single transaction. Further, a withdrawal won’t be authorised if it leaves your balance below £10,000. In this scenario, you’ll need to close your account.

Meanwhile, with the Close Brothers Savings account, the rate drops to 1% AER if your balance falls below £10,000.

Elsewhere, Kent Reliance offers a slightly lower 4.96% AER/gross, but may be suitable for those with a more modest sum to deposit – £1,000. It can also be opened in branch and online, but managed in branch, online and by phone.

Notice accounts offer higher rates

If you can give a lender notice of when you’d like to access your cash, then these accounts may work for you.

The Oxbury 90 Day Notice Base Rate Tracker (Issue 1) pays 5.32% AER/gross on a minimum £1,000. There’s no access to your cash earlier.

The DF Capital 90 Day Notice Account (Issue 1) pays 5.30% AER/gross on £1,000. Again, no earlier access is allowed.

Can you lock in for longer?

If you don’t need to access your cash in the short term, then you could consider a one-year fixed rate bond.

Currently, Habib Bank AG Zurich pays 5.21% AER on its 12 Month Fixed Rate eDeposit account if you’ve a minimum £5,000 balance. It can be opened online and managed by post.

Or you could park £5,000 with The Access Bank UK and its Sensible Savings 1 Year Fixed Rate Bond, which pays 5.2% AER. It can be opened online or by post.

With both accounts, there’s no access within the term, and interest is paid on maturity.

Related: Savings market ‘holding its breath’: Top-paying accounts right now