Santander has launched the Edge account, a new savings product that could yield up to £608 per year in combined benefits, including interest, cashback, and a switching bonus. The account is designed to reward both new and existing customers with a competitive rate and additional perks.
Key features of the Edge account
The Edge account offers a standard interest rate of 3.5% AER (3.45% gross). However, for the first 12 months, new customers receive a boosted rate of 6% AER on balances up to £4,000. For example, depositing £1,000 would earn approximately £60 in interest over the year, while depositing the full £4,000 would yield £240 in interest.
In addition to the interest, Santander is offering a £180 switching incentive for customers who move their current account to the Edge account. This cash payment is made shortly after the switch is completed.
Combining with Regular Saver for extra earnings
Kate Steere, personal finance expert at comparison site Finder, recommends pairing the Edge account with Santander's new Regular Saver, which offers an 8% AER interest rate for the first 12 months. Customers can deposit up to £200 per month into this account, potentially earning £104 in interest over the year if the maximum is deposited each month.
Additionally, the Edge account provides 1% cashback on eligible household bills, capped at £10 per month. This means customers can earn up to £120 in cashback annually.
Total potential benefits and fees
Summing up the potential earnings: £180 switch incentive, £240 interest from the Edge account (on £4,000 balance), £120 cashback, and £104 interest from the Regular Saver, totalling £644. However, the Edge account carries a monthly fee of £3, which amounts to £36 per year. Subtracting this fee leaves a net benefit of £608.
It is important to note that the 6% interest rate applies only for the first 12 months, after which it reverts to the standard 3.5% rate. The Regular Saver also has a 12-month term, after which the rate may change.
Comparison with other bank switching offers
Santander's £180 switching incentive is competitive but not the highest on the market. HSBC offers £220, Barclays and NatWest each provide £200, Lloyds offers £200 for Club Lloyds and £500 for Lloyds Premier. These incentives are often referred to by money expert Martin Lewis as a 'legal bribe' for customers to move their banking.
To maximise the benefits, customers should ensure they meet the eligibility criteria, including paying in a minimum monthly amount and setting up direct debits. The Edge account is available to new and existing Santander customers, but the switching bonus is typically only for new customers.
