Santander launches 8% savings account - who can get it and is it worth it?

Savers can now earn up to 8% interest on their money thanks to Santander’s new market‑leading regular savings account.

However, there are important conditions and limitations to consider before opening an account.

Here we look at everything you need to know about Santander’s 8% saver and how it compares to other savings options.

Who can open Santander’s 8% savings account?

The Santander Regular Saver is only available to existing Santander current account holders.

This means you’ll need to switch your main bank account to Santander if you’re not already a customer.

This may be the push you needed if you wanted to change provider – but you should always make sure your everyday account is the best option to suit your needs.

How does the Santander regular saver work?

Santander’s 8% interest rate includes a 5% variable bonus, which is only paid for the first 12 months.

After this, the rate drops to 3%.

As with other regular savings accounts, this deal is designed to help you build savings gradually and you can save up to a maximum of £200 per month.

The minimum balance you can hold is £1.

Interest rates are often higher on regular savings than standard savings accounts, but only for a limited time - usually 12 months.

Unlike some regular savers, Santander allows flexible withdrawals without penalties, giving customers easier access to their money if needed.

Is Santander’s 8% regular saver a good deal?

The Santander 8% regular saver can be a great option for disciplined savers looking to build a pot over time.

However, it may not be the best fit for everyone.

The £200 monthly cap limits how much you can benefit from the headline rate

You should also think carefully about switching to a new current account for the rate which only lasts for one year.

It's worth looking at the savings rates you can get with your own bank or in the wider market first.

If you have a large lump sum, you may earn more overall interest from accounts that accept bigger deposits even if the interest rate is lower

Rachel Springall, finance expert at moneyfactscompare.co.uk, said: “It is great to see the account made available to both new and existing current account customers, including its fee-free Everyday option.

“Regular savings accounts are ideal for slowly building a pot as they encourage the savings habit.

“However, 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.”

The current average one-year fixed rate is 4.24% while the average easy access ISA offers 2.73%, according to Moneyfacts.