Santander has launched a new checking account which could offer switchers nearly £400 in cashback and interest in the first year.
The bank unveiled its new Santander Edge account alongside an exclusive easy-access linked savings account.
The current account offers cashback on debit card spending and direct debits, with up to £20 per month available, although there is a monthly account fee of £3.
Santander has unveiled Santander Edge, a new exclusive and easy-to-access linked checking account and savings agreement, which offers up to £400 in cashback
Meanwhile, his linked savings account offers customers 4% interest on balances up to £4,000.
A person maintaining the maximum balance of this account will earn £13.10 per month.
It should be noted that the interest rate of 4% includes a bonus rate of 0.5% for the first 12 months from the opening.
The new bank account effectively replaces Santander’s current 1|2|3 Lite account, which was removed from sale today.
However, existing 1|2|3 Lite customers can continue to use their account as usual.
There will be no impact on the popular 1|2|3 checking account or any other Santander checking account.
The new Santander Edge account and the exclusive Edge saver can be opened in branch or online.
>> Check the best savings rates using This is Money’s independent tables
How the Santander Edge cashback system works
There’s 1% cash back on essential grocery purchases and transit-based debit card spending. This is capped at £10 per month.
There is an additional 1% refund on household bills paid by direct debit covering council tax, gas and electricity, mobile, landline, 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 monthly fee of £3 is unavoidable, so prospective members will need to take that into account.
Categories: Cashback on Santander Edge is limited to transport, groceries and household bills and capped at £20 per month
To benefit from it, this account must therefore be used as the main bank account. Customers would be advised to check their monthly expenses to verify how much cashback they are likely to be on track 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 Alvarez, Chief Client Officer at Santander UK, said: “We are delighted to be able to unveil Santander Edge, designed around what we know our customers want from their bank.
“We created a new account to help customers get the most out of their money today and save for a better tomorrow.
“Building on our focus on cashback, we will reward them for their essential expenses, whether that’s weekly shopping at the supermarket or commuting to work, and their household bills – particularly relevant given the current pressures.
“The Exclusive Saver also offers a preferential rate for people looking to earn interest on their easy-to-access savings.
“On top of that, we’ve improved our app, with more in-app benefits rolling out over the coming months.”
How does it compare?
Santander is not the only bank with a decent cashback offer at the moment.
Those specifically looking for cashback options might prefer the free digital bank, Chase, which is part of US giant JP Morgan.
Perhaps most notably, Chase is offering 1% cash back on all spend for the first 12 months.
It’s more generous than most cashback credit cards – but only for 12 months and with certain exceptions.
This means someone spending £24,000 on the card in their first year could receive up to £240 in cashback.
This is the same spending amount that would be required on Santander’s new account, but without the category constraints or £3 monthly fee.
Do your math: People evaluating Santander’s latest offer may find other deals make financial sense
Another option for those tempted by Santander’s offer is to consider some of the generous switch deals currently available.
For example, HSBC and Nationwide both offer cash incentives to new current account customers, giving them a £200 bonus for switching.
Those opting for the HSBC Advance account will only need to do so via the Current Account Switching Service (CASS) and set up at least two direct debits or standing orders.
Members will also need to deposit at least £1,500 into the new account within 60 days of opening it.
As with Nationwide’s offer, customers must make a full switch using CASS and a minimum of two active direct debits must be transferred to the new account.
As well as the £200 freebie, both providers are also giving their customers access to exclusive savings offers, similar to Santander.
HSBC’s Online Bonus Saver Account is basically an easy-to-access offer paying 3% on balances up to £10,000, exclusive to HSBC banking customers.
Someone depositing £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 downside 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%.
Nationwide offers 5% interest earned on balances up to £1,500 held in the Nationwide Flex account allowing new members to secure up to £75 in the first year from interest.
Old and New: How Santander’s New Edge Current Account Compares to the 1|2|3 Lite Account
THESE ARE FIVE OF THE BEST MONEY CURRENT ACCOUNTS
hunting bank will pay 1% spend discount for the first 12 months. Customers also have access to an easy-to-access linked savings account paying 1.5% on balances up to £250,000. The account is completely free to set up and is completely app-based. Also no fees when using the card abroad.
Club Lloyds Account offers £150 free money when you change. It also pays 0.6% on balances up to £4,000 and 1.5% on £4,000 to £5,000. There is a monthly account fee of £3 to pay. But this is reversed every month you pay £1,500 or more.
HSBC advance account pay £200 when you change. All you need to do is set up two direct debits and deposit £1,500 into the account within 60 days of opening it.
Direct premiere will give newcomers £175 when they switch accounts. It also offers an interest-free overdraft of £250. Customers must pay at least £1,000 within three months of opening the account.
Nationwide’s FlexDirect account comes with up to £200 cash incentive for new and existing customers. Plus 5% interest up to £1,500 – the highest interest rate on any current account – if you deposit at least £1,000 a month, plus free overdraft. These last two benefits last for one year.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.