Santander offers best easy-access savings deal in 14 years as banks face battle for customers in rates war

4 September 2023, 14:07

Santander is offering a new savings rate
Santander is offering a new savings rate. Picture: Alamy

By Will Taylor

Santander could kick off a rates war as it tries to bring in customers with a new easy-access savings account paying out 5.2% on balances up to £250,000.

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The deal, which lasts for 12 months, is available until September 17 but the bank has warned it could be withdrawn if demand is too high.

It is available to existing Santander customers and newcomers, and an account can be opened online, over the phone or in a branch.

It represents the highest-paying easy access account the Spanish bank has launched for 14 years.

Read more: Bank of England puts interest rate up to 5.25% in fourteenth consecutive rise

The previous best easy-access account was a 5% deal offered by Furness Building Society.

Andrea Melville, of Santander, said: "We're pleased to deliver this top of market product for our customers, providing the convenience of an easy-access account, to help build up their savings.

"We know now more than ever people want their money to go further and this account is one of the ways we are helping customers maximise their savings income."

Santander is offering attractive rates as part of a new package
Santander is offering attractive rates as part of a new package. Picture: Alamy

It has also boosted its one year fixed term Isa to 5.05% and its two year fixed term Isa to 5.1%.

Customers will now look to see if other banks start offering better deals to compete.

The government has told banks to do more for customers saving with them amid the cost of living crisis, with the Financial Conduct Authority threatening to act if savers don't get a fair deal.

Read more: Banks to be fined for not giving access to cash, as ATM group chief says law change 'just in time'

It is thought about £250bn is saved in accounts that earn no interest, despite the Bank of England upping interest rates 14 times since the end of 2021.

And National Savings and Investments, the state owned savings bank, announced just days ago that it was launching a one-year fixed rate savings account with a 6.2% rate.

Santander's package can be accessed through its app
Santander's package can be accessed through its app. Picture: Alamy

That was expected to convince high street banks to up their rates.

Virgin Money now offers 4.51% on its "easy access cash Isa exclusive" and launched a one-year fixed rate Isa with a rate of 4.25%.

Nationwide paid its eligible members £100 in June, announcing it as a "Fairer Share" but pointing out the offer was a one off.