The banking giant last week upped rates across a number of fixed rate cash ISAs, leading to it taking first place in the best buy tables for its one-year and two-year deals.

Since then, other banks have pipped it to the top spot on their one-year offerings (Castle Trust Bank 3.15% and Virgin Money 3.02%).

But Santander has now launched a £50 retail cashback voucher for customers transferring ISAs of at least £10,000 from another provider into one of its fixed rate ISAs, including:

• 1 Year Fixed Rate ISA – 3% AER/ tax-free (fixed)
• 18 Month Fixed Rate ISA – 3.1% AER/ tax-free (fixed)
• 2 Year Fixed Rate ISA – 3.25% AER/ tax-free (fixed).

When factoring in this £50 voucher with the 3% offered on its one-year cash ISA, customers transferring the minimum £10,000 from another provider to Santander can earn the equivalent rate of 3.5%.

Anna Bowes, co-founder of Savings Champion, calculated that £10,000 earning 3% would see savers make £300 in interest. But with the voucher, that equals £350 all in, giving an equivalent rate of 3.5%.

However, if you were to deposit £20,000, there is a “diluting effect” as savers would receive £650 which is the equivalent of 3.25%.

“The more that’s deposited, the greater the dilution”, Bowes noted.

Santander’s £50 cashback voucher

Eligible customers transferring the minimum £10,000 into one of Santander’s fixed rate cash ISAs will receive the voucher code automatically by email within 30 days of the completed transfer.

It can be spent online or in-store (varies depending on the retailer) at over 100 retailers, including Amazon, Currys PC World, Just Eat and Primark, to name a few. See the full list of retailers here. The expiry date will vary on the retailer.

Hetal Parmar, head of banking and savings at Santander UK, said: “Saving for the future is important to many and our increased cash ISA rates will give customers a boosted return – all tax-free. The voucher offer is an added extra, putting more money in our customers’ pockets this autumn, and our ISA transfer team is in place to help customers benefit from these limited time offers.”

Santander has also increased the rate on its easy access eISA to 1.85% (variable).

Ordinarily, savers need a minimum £500 to open one of its fixed rate ISAs. With the fixed rate ISAs, you can only access your cash if you close the account. However, this is subject to 120 days’ loss of interest.