Santander launches market-leading Regular Saver paying 8% AER

The Regular Saver is available to new and existing Santander current account customers – including those with its fee-free Everyday Current Account.

Savers can now earn a market-leading 8% AER with the new Regular Saver from high street bank, Santander, which launched today.

Available to eligible new and existing Santander current account customers (including those with its fee-free Everyday Current Account), it can be applied for online, in branch, over the phone or via mobile app with a minimum deposit of just £1.

Once opened, the account can then be managed using the same methods and accepts further contributions of up to £200 per month. This means someone paying in the maximum amount could earn over £100 in interest over the course of a year (with returns paid on anniversary). Withdrawals, meanwhile, are allowed at any time via a Santander current account.

However, it’s important to bear in mind that the interest rate is variable – so it could go up or down at short notice. Furthermore, the headline rate is bolstered by a 5.00% AER bonus for 12 months (also variable), after which the account currently offers 3.00% AER.

Nevertheless, Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said the account is “incredibly eye-catching for those looking to gradually build their savings pot” and added that it differs from “other regular savers on the market that revert to a flexible saver earning a much poorer return”.

How does it compare?

The new Regular Saver from Santander is currently unbeaten on our regular savings account chart, however, those who’d prefer an interest rate that’s guaranteed to stay the same over a 12-month period could consider the Regular Saver Account from first direct which pays a flat, fixed rate of 7.00% AER at maturity.

New and existing first direct customers who either have or open its 1^st Account can apply online or via mobile app and additionally manage the regular savings account over the phone. (There’s also £200 cashback up for grabs at the moment for eligible current account switchers; Ts&Cs apply). But, it should be noted that this option requires savers to deposit between £25 and £300 per month, and only allows them to access their cash before the 12-month term ends subject to account closure and receiving the lower rate paid by its Savings Account.

Therefore, while regular savings accounts typically offer some of the most competitive interest rates on the market, Springall said “consumers will need to work out if they are the right choice for them as some accounts can be restrictive and might not be suitable for larger deposits”.

Those looking to save bigger amounts could explore fixed bonds, easy access or notice savings accounts (many of which can hold more substantial balances). Find accounts that cater to your needs by changing the ‘investment amount’ at the top of any of our savings charts.