The bank has upped its Regular eSaver rate from 3% to 5% AER gross (fixed) for 1|2|3 World customers – those who have a 1|2|3 current account or 1|2|3 credit card – as well as for its Select (premium) members.

The new rate is valid for new customers opening the account from 3 April, but Santander confirms that those who opened the account from 13 March onwards will also be moved across to the higher rate with interest backdated.

Customers can open the account online or in a branch and there’s no minimum opening or monthly deposit. But the maximum customers can save each month is capped at £200.

After 12 months, the account will revert to Santander’s Everyday Saver paying 0.10% AER.

Based on the maximum monthly contribution of £200 over the course of a year (£2,400), World and Select customers will earn £64.33 in interest.

For non World or Select customers wishing to open the regular savings account, they’ll be offered an interest rate of 2.50% AER gross (fixed), meaning they can earn a maximum of £32.16 on £2,400.

How does it compare to other linked regular savings accounts?

The Santander deal at 5% is good but there are three others that are better, according to Andrew Hagger of Moneycomms.

He said: “First Direct pays the same 5% rate for 12 months but allows you to save £300 per month as opposed to £200 with Santander.

“M&S Bank’s monthly saver is also 5% but it allows you to save up to £250 per month.

“But the best deal in my opinion is Nationwide Building Society’s Flexclusive saver – you can save up to £500 per month although the 5% rate is variable and could change but you are allowed instant access to your cash at anytime which is very rare with such accounts.”