Santander has introduced a new regular savings account offering an 8% interest rate. This type of account allows individuals to set aside a fixed amount of money each month in return for a higher interest rate.
The Santander account features an 8% interest rate, which includes a 5% bonus for the initial 12 months. After this period, the rate drops to 3%. These rates are subject to change as they are variable.
Customers of Santander can save up to £200 monthly through this regular saver account, potentially accumulating £2,504 with interest after a year, and £5,018 in the second year. Withdrawals can be made without penalties, but only by transferring the funds to a Santander current account.
The Regular Saver account is exclusively accessible to all Santander current account holders. João Soares, Head of Savings at Santander UK, stated that the new Regular Saver provides customers with a competitive rate and simplicity, supporting those looking to cultivate a saving habit regularly.
Santander is not the only bank offering a regular savings account. Zopa offers a 7.1% variable rate for six months on deposits up to £300 monthly. First Direct provides a fixed 7% rate for one year with deposits up to £300 per month, while Co-op Bank offers 7% on monthly savings up to £250.
For standard easy-access savings accounts, the current best rate stands at 5%. Revolut offers 5% to new customers for six months, including a 2.9% variable rate and a bonus rate of 2.1% for six months.
Cahoot offers a 5% rate on savings up to £3,000. StreamBank provides the top one-year fixed rate at 4.81%, and Afin offers a five-year fixed rate of 4.9%.
Regarding tax implications, basic-rate taxpayers can earn up to £1,000 in savings interest per tax year before incurring taxes. The Personal Savings Allowance for higher-rate taxpayers is £500 annually, while additional rate taxpayers do not receive this allowance. For individuals earning below the personal allowance of £12,570, there is a starting rate for savings of £5,000, which decreases as income surpasses this threshold.
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