Santander has introduced a fresh regular savings account offering a high interest rate of 8%. This type of account enables savers to set aside a specific sum of money each month in return for a more favorable interest rate.
The new Santander account features an 8% rate with an added 5% bonus for the initial 12 months. Post this period, the rate drops to 3%. These rates are subject to change as they are variable.
Customers with Santander can save up to £200 monthly using this regular saver, potentially accumulating up to £2,504 with interest after one year, and £5,018 in the second year. Withdrawals are penalty-free but require transferring the funds to a Santander current account.
Exclusive to Santander current account holders, the Regular Saver is not the only option available. Zopa offers a 7.1% variable rate for six months on deposits of up to £300 monthly, while First Direct and Co-op Bank provide 7% rates with varying monthly deposit limits.
For those seeking easy-access saving accounts, Revolut offers 5% to new customers for six months, including a 2.9% variable rate and a six-month 2.1% bonus rate. Cahoot presents a 5% rate on savings up to £3,000.
Taxpayers can earn up to £1,000 in savings interest annually tax-free at the basic rate (20%), with the Personal Savings Allowance. Higher-rate (40%) taxpayers have a £500 allowance, while additional rate (45%) taxpayers do not receive any allowance.
For those earning below the personal allowance of £12,570, there is a £5,000 starting rate for savings, reducing by £1 for every additional pound earned above the personal allowance. It is important to note the tax implications based on your income level.