Santander has climbed to the top of the best buy tables, with its one-year fixed rate cash ISA paying 3.7% and its two-year deal paying a market-leading rate of 4.2%.

But there is a way for some customers to get the same rate as the two-year deal by only locking up their money for a year.

This is because Santander’s running a £50 retail cashback voucher offer for customers transferring ISAs of at least £10,000 from another provider into any of its fixed rate ISAs, including:

• 1 Year Fixed Rate ISA – 3.7% AER/ tax-free (fixed)
• 18 Month Fixed Rate ISA – 4% AER/ tax-free (fixed)
• 2 Year Fixed Rate ISA – 4.2% AER/ tax-free (fixed).

When factoring in this £50 voucher with the 3.7% offered on its one-year cash ISA, customers transferring the minimum £10,000 from another provider to Santander can earn the equivalent rate of 4.2%.

Savings Champion calculations showed that £10,000 earning 3.7% would see savers earn £370 in interest. But with the voucher, that equals £420 all in, giving an equivalent rate of 4.2% – the same interest level for customers tying up their cash for two years.

However, if you were to deposit £20,000, there is a “diluting effect” as savers would receive £790 which is the equivalent of 3.95%.

According to HMRC figures, the average ISA pot in the UK is £21,996, meaning transferring a two-year fixed rate ISA product would see annual returns of £923.83, plus the £50 voucher.

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 restaurants, supermarkets, clothes stores and subscription services. Names include 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.

The terms and conditions state that the £50 voucher is subject to availability and may be withdrawn at any time so you may need to move quickly, if it’s right for you and your circumstances.

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

Santander has also increased the rate on its easy access eISA from 1.85% to 2% (variable), while its eSaver pays 2.75% AER/gross (variable) for 12 months. It’s available until 1 November 2022.

Hetal Parmar, head of banking and savings at Santander UK, said: “We are delighted to boost returns on savings with best buy rates across a range of accounts that fit with different savings goals. Savers can choose the flexibility of easy access savings as well as guaranteed rates on tax-free ISAs, all with the peace of mind that their money is earning a great return.”