>
Santander launches a new wave of Isa best buy deals, including an easily accessible bill that pays 1.85%… but there’s a catch
- Santander’s easily accessible deal is 0.1 percentage point higher than the 2nd best
- However, after the first year, savers see their rate drop to 0.1%
- His one-year cash Isa pays 3% – 0.35 percentage points higher than next best
<!–
<!–
<!–<!–
<!–
<!–
<!–
As soon as we announce another best-buy-cash Isa, it looks like another will climb the rankings of our savings rates to claim first place.
Santander has taken the spotlight this time in the tax-free savings space by launching a new, easily accessible cash Isa that pays 1.85 percent interest.
Someone who is able to put the maximum annual Isa payout of £20,000 into Santander’s deal can expect a return of £373 after one year.
Please note that after the first 12 months, the savings from the lucrative eIsa are transferred to Santander’s Isa Saver account, which currently pays 0.1 percent.
It replaces Gatehouse Bank, which earlier this week launched a deal that paid 1.75 percent.
Santander has also launched a market-leading one-year fixed-rate Isa that pays 3 percent and a two-year top deal that pays 3.25 percent.
Savers can start from as little as € 500 and it is also possible to transfer Isas from other providers at any time.
Since the easy access account is a new release of Santander’s eIsa account, existing customers who signed up under previous releases, such as issue 14, who paid 1.5 percent, will not see their rate increase automatically.
Savers should also be aware of one major drawback. After the first 12 months, their money is transferred from the lucrative eIsa to Santander’s Isa Saver account, which currently pays 0.1 percent.
So, at the end of the first year, they will have to review their options and transfer their funds to a new provider.
Those willing to forego access to their money for a year or more in exchange for higher interest rates may prefer to opt for Santander’s fixed-income Isa deals.
However, fixed cash Isa rates pay much less than their non-Isa equivalents due to their tax-exempt status. The second-best Isa fixed-rate deal for one year pays 2.65 percent compared to the best taxable fixed-rate deal that pays 3.4 percent.
| Account type (min. investment) | Rate (tax free) | ||||||
|---|---|---|---|---|---|---|---|
| A YEAR | |||||||
| Santander (£500+) | 3.00 | ||||||
| Leeds BS (£1,000+) | 2.65 | ||||||
| Safe trust (£1,000+) | 2.65 | ||||||
| 18 MONTHS | |||||||
| Santander (£500+) | 3.10 | ||||||
| Skipton BS (£10,000+) | 2.75 | ||||||
| TWO YEARS | |||||||
| Santander (£500+) | 3.25 | ||||||
| Hodge Bank (£1,000+) | 3.17 |
However, Santander has closed this gap by launching its 3 percent one-year cash Isa. Someone who deposits £20,000 into this account can receive £608 in interest.
Again, this deal can be opened with just £500. However, unlike the easily accessible option, once committed savers cannot withdraw money from this account unless they close it. There is a penalty of 120 days of interest if you close the account early.
Those who want to transfer Isas from other carriers must do so within 14 days of opening.
Savers who prefer to hold on longer can secure 3.25 percent interest by fixing for two years with Santander.
Someone who deposits £20,000 into this account can earn £1,341 in interest over the course of two years.
It’s also worth pointing out that Santander also offers an industry-leading 18-month Isa deal that pays 3.1 percent.