Money Insider: Santander – up front with savings interest
Saturday 12 November 2011
It's been a hive of activity in the savings market over the last couple of weeks, with some cracking new fixed rates being launched as well as an eye-catching new promotion from the Spanish banking giant Santander.
As part of its continued aggressive drive to win more personal bank accounts, Santander has come up with a new product which will pay three years' worth of savings interest up front for customers with or who open a Santander current account.
As well as the requirement to hold a current account with the bank, you'll also need a minimum savings balance of £10,000 to be eligible to open one of the new Upfront Savings Bonds.
The option to be able to earn three years' worth of interest in advance, even though the rate is less than market leading, will no doubt appeal to some savers, particularly those who rely on their interest income to help with day-to-day living costs.
You can currently get better fixed rates of 4.30% gross with Yorkshire Bank and 4.15% gross with AA Savings where a £12,000 balance would net you £1,238 and £1,195 respectively after three years, compared with the £1,000 net which you'd receive under the Santander deal.
The concept is unique in the UK savings market and even though the rate being offered is not a best buy, I'm sure some people will be content to accept a lower return as a trade-off for 3 years' worth of interest up front.
As well as a means of increasing its share of the current account market, the maximum savings limit of £2m could bring in a significant amount of new credit balances for Santander too.
It's an interesting move in what has become a lacklustre and sterile savings market. Time will tell if it's enough of a carrot to convince many people to switch their bank account.
It's refreshing to see this sort of innovation, giving savings customers more options in this low interest rate environment, and comes a little after a month after high-street rival Halifax launched its monthly Savers Prize Draw. Maybe it will inspire other providers to respond with their own fresh ideas.
Coventry launches Poppy Bond
The latest edition of the popular Poppy Bond from Coventry Building Society is now on sale, paying 3.55% gross/AER fixed until 30 April 2013.
The bond can be opened in branch, online or by phone, and has a minimum balance requirement of just £1. There is a monthly interest option of the account available, but as with the majority of fixed rate accounts, be aware that there is no access to your capital until the bond matures.
The rate on this 18-month deal is competitive but doesn't live up to the current best buy rates for one and two year bonds. However with this particular savings bond, it's not all about what's in it for the customer, it also delivers an important contribution to one of our most worthy charities.
Coventry Building Society will donate 0.05% of the total amount invested in this bond to the Royal British Legion. Previous bond sales have raised in excess of £5m for this cause since the poppy product range was launched in 2008. The much-valued work of the Royal British Legion is as important and relevant now as it has ever been and let's hope this latest bond leads to another significant donation.
Clydesdale and Yorkshire blitz fixed rate best buys
Savers looking for a decent return on their fixed rate savings will welcome the latest range of table-topping deals from Yorkshire Bank and Clydesdale Bank.
It's quite normal to see a bank or building society launch a one-off best buy deal targeted at a specific term, but Yorkshire Bank and Clydesdale Bank has thrown down the gauntlet across the board, offering the top rate for 1 year (3.60%), 2 year (4.00%), 3 year (4.30%) and 5 year (4.70%) bonds.
There are monthly interest versions of these bonds available, but this facility is only available if you have a separate account with Yorkshire Bank for the interest to be paid to.
The rates for 1 and 2 year bonds are still only paying barely half what they were three years ago, but it's time to move on and accept that we're not going to see savings rates at that level for some considerable time.
We need more examples of this sort of competition to drive up interest rates. It will be interesting to see how long these products remain on sale and whether it will provoke a positive reaction from the rest of the market.
Andrew Hagger – Moneynet.co.uk
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
Day In a Page
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000