Spotlight On: Santander's upfront interest

The deal

Santander's new Upfront Interest Bond pays three years' worth of interest when you open the bond, rather than making you wait until the end of the three year term.

Good points

The fixed rate bond pays 3.36 per cent a year. So if you save £12,000, you'll be handed £1,000, after tax has been taken out. You can do what you like with the cash, even putting it into another savings account to earn extra interest.

Bad points

The minimum investment is £10,000 and you must have a Santander current account. There are better three year fixed savings rates Yorkshire Bank pays 4.3 per cent, for instance.

Conclusion

This gimmicky account offers less interest than rivals and you have to open a current account with the Spanish-owned bank to qualify. It doesn't really seem worth the bother unless you're happy to get less interest in return for the benefit of having the money now rather than waiting three years.