Major bank offering £50 payments to customers and you’d get cash before Christmas
A HIGH street bank is giving away £50 free to customers who move their savings account to it from elsewhere.
The reward is available to any new or existing customer who switches their Isa from another provider to the bank.
The offer from Santander could be withdrawn at any moment – so those eyeing up the extra cash for Christmas should act fast.
To be eligible customers must transfer an Isa worth £10,000 from another provider into one of Santander’s fixed-rate ones.
An Individual Savings Account (Isa) allows you to hold savings and investments without paying tax on the interest you earn.
You can pay in up to £20,000 into one account or split your allowance between several providers every tax year.
Once the transfer is complete the bank will give customers a £50 e-voucher.
This can be spent at more than 100 restaurants, supermarkets and clothes stores including Argos, B&M and Primark.
Andrew Hagger, personal finance expert at Moneycomms, said: “This is a good incentive – especially for people who may be sitting on some poor performing Isas.”
Banks offer incentives to encourage savers to switch, which increases the number of customers and amount of money they handle.
But it’s important to check that an account is right for you before you switch, instead of moving your money just to get an incentive.
How do I get the deal?
First you need to apply for or upgrade your existing Santander Isa to a Fixed Rate Isa.
Once the account is opened, you must complete a transfer in instruction.
Santander suggests that you do this on the day you open your account or upgrade.
You can do this online or in a branch.
The instruction asks for your non-Santander Isa to be transferred to your new Fixed Rate Isa.
What is an Isa?
Isa stands for Individual Savings Account.
There are four types: cash Isas, stocks and shares Isas, lifetime Isas and innovative finance Isas.
The main benefit of an Isa is that all the money you pay in is tax-free.
This means that you do not need to pay tax on the amount you have saved or any interest you earn.
Every tax year you can save up to £20,000 in one Isa account or split your allowance across multiple accounts.
The tax year runs from April 6 to April 5.
You can open one with most banks and building societies.
Some providers will have restrictions on the minimum amount you can pay in and may require you to deposit a certain amount in order to open an account.
You need to do this within the first 14 days of opening your Isa account.
When you complete the form you will need to ask for a full transfer of your existing non-Santander account, which must have a balance of £10,000 or more.
You must provide an up-to-date email address which the bank can use to email you the code to redeem your e-voucher.
Your account could take up to 30 days to transfer.
You will be sent a code to redeem your e-voucher within 14 days of your transfer completing.
What Isas does Santander have?
Santander currently has three fixed-rate Isas on offer.
The interest rate on these accounts is fixed, which means that it will not go up or down.
You need £500 or more to open one of these accounts.
The one-year fixed-rate Isa gives you 4.01% interest on your nest egg.
If you transferred the minimum £10,000 this would give you a return of £33.42 a month, or £401 over the course of a year.
The 18 month fixed-rate Isa has a slightly lower return, at 3.91%.
On a £10,000 nest egg you would get £32.58 in interest each month, or £391 a year.
The two year fixed-rate Isa has the least generous interest rate of all of the accounts.
It has an interest rate of 3.81%, which would give you £31.75 a month, or £381 a year, on a £10,000 balance.
If you want to withdraw money from the account before its fixed-term has ended then you will need to close your account.
A charge equivalent to 120 days’ interest will be applied.
How does it compare to others?
Virgin Money has the best one-year fixed-rate cash Isa of all banks and building societies.
It offers a return of 4.61% on your nest egg.
If you had £10,000 in savings this would give you £38.42 a month in interest – £5 more than the best Santander account.
Over the course of a year you would earn £461 in interest, £60 more than with the Santander account.
If you take into account the £50 bonus you would still be £10 better off after a year with the Virgin Money account.
Plus there is no minimum amount you need to open this account, which makes it a good option for savers with smaller pots.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Savers need to be wary of cash sweeteners if the account itself does not offer the best value compared to other similar accounts.
“Santander’s rates are not market leading and there are a plentiful amount of challenger banks offering much higher rates.”
How do I compare rates?
You can find a full list of the best Isa accounts by using a comparison website such as Compare the Market and Moneyfactscompare.co.uk.
These will help you save you time and show you the best rates on offer.
You can also filter your searches by length or account type.
As a rule of thumb, you only want to consider an account that pays more interest than the current level of inflation, which is 1.7%.
It is a good idea to keep some money in an easy-access savings account which you can use in an emergency.
Once you have found an account you like you should contact the bank or building society you want to move to.
You will need to fill out an Isa transfer form to move your account.
Do not withdraw money from one account to pay into another as you will not be able to reinvest it as part of your tax-free allowance again.
It should not take longer than 15 working days to transfer money between cash Isas.
It can take up to 30 days for other types of transfer.
If your transfer takes longer than it should then contact your Isa provider.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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