Santander stretches eSaver higher interest period till June 2024. Should you stick or twist?
Santander has pushed back the maturity date of its popular Limited Edition eSaver (Issue 1) savings account from 12 months to 20 months. But is this a good deal for savers?
In October 2022, Santander launched a market-leading easy access savings account – the Santander eSaver Limited Edition (Issue 1) account.
It was withdrawn from sale two weeks ahead of schedule due to ‘unprecedented demand’, as it offered savers a top rate of 2.75% AER/gross (variable) for 12 months on a minimum £1 and maximum £250,000 balance.
Today, the eSaver pays 3.75% and Santander has informed customers that from 11 October 2023, it will extend the term of the interest rate from 12 months to 20 months.
Originally after 12 months, the account was due to transfer to the Everyday Saver which currently pays 0.85% AER/gross.
But as the banking giant will extend the term to 20 months so that the eSaver matures in June 2024 instead of October 2023, is this a move that will benefit account holders?
It confirmed that customers can continue to withdraw money whenever they wish.
If you currently have the Santander eSaver Limited Edition (Issue 2) account which currently pays 2%, Santander confirmed there’s no change in the term here so it remains at 12 months.
A spokesperson, said: “We regularly review all our savings products to ensure we continue to deliver ongoing value to customers right across our savings range.”
Current best buy easy access savings rates
Savings rates have risen at pace over the past year and a half since the Bank of England started its base rate hiking cycle in December 2021.
This has been good news for savers who were starved of decent interest on their cash holdings built up during the pandemic lockdowns.
But as the market is moving so fast, savers have had to chop and change as they chase the best rate.
So how good is Santander’s 3.75% offering?
It’s not the best, according to Savings Champion data, which reveals that the current top paying easy access account offers 4.35% AER gross variable (annual interest or 4.27% AER gross with monthly interest. See YourMoney.com’s Confused over monthly or annual savings interest? Here’s what you need to know.
This is the Shawbrook Easy Access Account (Issue 36) which requires a minimum holding of £1,000 but has no limit on the number of withdrawals you can make and doesn’t require any notice to get to your cash. However, the minimum withdrawal amount is £500 and you can get next working day access to your money if withdrawn online before 9:30pm. If your balance falls below £1,000, you’ll earn a worse than paltry 0.05% gross/ AER variable. It can be opened online and managed online and via phone.
Alternatively, Cynergy Bank’s Online Easy Access Account (Issue 63) pays a slightly lesser 4.30% AER gross on a minimum opening balance of £1. This product includes a 1.09% bonus for the first 12 months. After 12 months, the interest rate reverts to 3.21% AER variable. You can make unlimited, free withdrawals and the account can be opened and managed online.
Other providers including Secure Trust Bank, Coventry Building Society and Principality also offer 4.30%, with the latter two restricting access to six withdrawals and two withdrawals permitted each year.
So, other providers easily beat the Santander deal and if you’re not loyalty-minded and are instead chasing the best rate, you may consider looking elsewhere.
However, for those already with Santander and who like having or seeing all the same accounts in one place, sticking with it may work for you, particularly as the other higher paying ‘easy access’ savings accounts come with some strings attached. Savers may prefer the real easy access nature of the Santander eSaver.