Santander eSaver Currently Pays 0.7% Variable

Written by Karen Bryan

santander esaver
Update 22 May 2015 – The Santander eSaver is currently paying a variable rate of 0.7%, for the first 12 months after opening. Customers holding either a Santander 123 Current Account or 123 Credit Card, earning a slightly higher, but still pathetic, rate of 1.0%, for the first 12 months after opening the account.

Update 25 January 2013 – Perversely, you can earn a higher rate of interest on your savings, 3%(variable) on deposits between £3,000 to £20,000, in the Santander 123 Cashback Current Account.

The Santander eSaver Issue 11  is currently (16 January 2014) paying a paltry 1.0 % (variable) for the first 12 months after opening.  After that period, the account will become an Everyday Saver account, currently paying 0.50% (variable).

It was one of the highest paying instant access accounts available when I  opened a Santander eSaver Issue 5 in April 2012, which is still paying the higher a rate of  3.2% (a variable bonus of 2.7% and a basic variable rate of 0.5%). But interest rates from new account holders have fallen dramatically. In addition, the fixed rate element has been ditched, so it’s now a totally variable rate.

As a back up, in case Santander do reduce the interest rate on the eSaver Issue 5, I  opened a Halifax Online Saver, paying 2.8% interest, made up of a 2.7% (fixed) bonus and an underlying rate of interest 0.1% (variable).  As I already bank with the Halifax, it only took a couple of minutes to apply online for this account.

It’s hard to decide where to save with the interest rates on most savings accounts currently paying less than the rate of inflation, especially if you have to pay tax on the savings interest. You have to keep on your toes, but if you end up forever opening new accounts and shunting money around accounts in different institutions it can end up being a bit of a pain and small increases in the interest rate can be eaten up when the funds are in transit.