Santander has launched a new checking account that could offer exchangers nearly £400 in cash back and interest within the first year.
The bank has introduced its new Santander Edge account along with a unique, easily accessible linked savings account.
The current account offers cash back on both debit card spending and direct debits, with up to £20 per month available, although there is a £3 monthly account charge.
Santander has launched Santander Edge, a new current account and exclusive, easy-to-access linked savings offer, offering up to £400 cash back
Meanwhile, its linked savings account offers customers 4 per cent interest on balances up to £4,000.
Someone who maintains the maximum balance in this account will earn £13.10 every month.
It’s worth noting that the 4 percent interest rate includes a 0.5 percent bonus rate for the first 12 months from opening.
The new bank account effectively replaces Santander’s current account 1|2|3 Lite, which has been withdrawn from sale today.
However, existing 1|2|3 Lite customers can continue to use their account as usual.
It will have no impact on the popular 1|2|3 Current Account or any other Santander current account.
The new Santander Edge account and the exclusive Edge saver can be opened both in a branch and online.
>> Check the best savings rates using the independent tables of This is Money
How the Santander Edge reimbursement scheme works
There’s a 1 percent cash back on essential grocery purchases and transportation-based debit card spending. This is capped at £10 per month.
There is an additional 1 per cent refund on household bills paid by direct debit covering municipal taxes, gas and electricity, mobile telephony, fixed telephony, broadband and pay-TV packages. Again, this is capped at £10 per month.
To earn the £10 cashback, customers will need to spend £1,000 per month in each category.
The £3 monthly charge is unavoidable so potential affiliates will need to take that into account.
Categories: Cash back at Santander Edge is limited to transport, groceries and household bills and is capped at £20 per month
To benefit, this account must be used as the primary bank account. Customers would be wise to check their monthly expenses to see what cash back they are likely to receive.
To be eligible for the Santander Edge current account, customers must have a minimum of £500 credited to their account each month and at least two active direct debits.
Enrique Álvarez, Santander UK Customer Service Director, said: “We are excited to introduce Santander Edge, designed around what we know our customers want from their bank.
‘We’ve created a new account to help customers make the most of their money today and save for a better tomorrow.
“Building on our approach to reimbursement, we will reward them for their essential expenses, whether it is the weekly grocery store or the commute to work, and their household bills, particularly relevant given the current pressures.
‘The Exclusive Saver also offers a preferred rate for people looking to earn interest on their easily accessible savings.
“On top of this, we’ve improved our app, with more in-app benefits rolling out in the coming months.”
How is compared?
Santander is not the only bank with a decent repayment agreement at the moment.
Those looking specifically for cash back options may prefer the free digital bank, Chase, part of US giant JP Morgan.
Perhaps most notably, Chase offers a 1 percent refund on all expenses for the first 12 months.
This is more generous than most cash-back credit cards, though only for 12 months and with certain exceptions.
It means that someone who spends £24,000 on the card in its first year could receive up to £240 in cash back.
This is the same amount of spending that would be required on the new Santander account, however, without the category restrictions or £3 monthly charge.
Do your sums: People weighing Santander’s latest offer may find that other offers make financial sense
Another option for those tempted by Santander’s offer is to consider some of the generous exchange offers currently available.
For example, HSBC and Nationwide are offering cash incentives to new checking account customers, offering them a £200 bonus for switching.
Those who opt for HSBC advance account you’ll just need to do it using the Checking Account Switching Service (CASS) and set up at least two direct debits or standing orders.
Affiliates will also need to deposit at least £1,500 into the new account within 60 days of opening.
For the Nationwide offer, customers must complete a full switch using CASS and a minimum of two active direct debits must be transferred to the new account.
In addition to the £200 giveaway, both providers also offer their customers access to some exclusive savings offers, similar to Santander.
HSBC Online Bonus Savings The account is essentially an easy-access deal that pays 3 per cent on balances up to £10,000, exclusive to HSBC banking clients.
Someone who deposits £10,000 into the HSBC account could expect to earn £300 in interest after one year, although the interest rate could change again in the future.
The drawback is the fact that the 3 percent rate only applies for any month in which no withdrawals are made. During a month in which a withdrawal is made or the account is closed, savers will only earn 0.5 percent.
Nationwide offers a 5 per cent credit interest on balances up to £1,500 in the Nationwide Flex account, allowing new members to earn up to £75 in the first year of interest.
Old and new: How Santander’s new Edge checking account compares to the 1|2|3 Lite account
THESE ARE THE FIVE OF THE BEST CHECKING ACCOUNTS FOR MONEY
chase bank pay to £1% reimbursement on expenses for the first 12 months. Clients also gain access to an easily accessible linked savings account that pays 1.5% on balances up to £250,000. The account is completely free to set up and completely app-based. There are also no fees when using the card abroad.
The Lloyds Club account offers £150 free cash when you switch You also pay 0.6% on balances up to £4,000 and 1.5% on £4,000 – £5,000. There is a £3 monthly account fee payable. But this doesn’t apply every month you pay £1,500 or more.
HSBC advance account pay £200 when you switch. You just need to set up two direct debits and deposit £1,500 into the account within 60 days of opening.
first direct will give newcomers £175 when they change their account. It also offers a £250 interest-free overdraft. Customers must pay back at least £1,000 within three months of opening the account.
Nationwide FlexDirect account comes with Cash incentive of up to £200 for new and existing customers. Plus 5% interest up to £1,500 – the highest interest rate on any current account – if you pay at least £1,000 each month, plus one free overdraft. These last two benefits last one year.
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