Written by Karen Bryan
Oh for a simple life. Over the last few years the Halifax savings rates have been pretty competitive; we’ve had various Cash ISA and savings accounts with them. We liked that situation, we have Halifax Reward Current Accounts, so we could deal with all our accounts and easily transfer between different ones with a single login. However, over the last few months the Halifax rates have not been in the least enticing and we’ve been shifting most of our money away to earn the highest interest rate, with Santander attracting a lot of our savings.
The twelve month bonus on our Halifax Web Saver Reward accounts expires at the start of next month. The highest rate instant access account currently on offer from the Halifax is 2.8% (2.7% fixed rate bonus plus 0.1% variable rate) in their Online Saver. The Santander eSaver Issue 5 is currently paying 3.2% (2.7% variable rate bonus plus 0.5% variable rate).
I had my Cash ISA savings pot with the Halifax, but their present offers are not good. The Halifax ISA Saver Fixed is paying 3.25% on a two year account. I just transferred my Cash ISA to the Santander 2 Year Fixed Rate Major ISA paying 4.0%.
It’s not much better on the instant access Cash ISA front. The Halifax ISA Saver Online is paying 2.8% (2.7% fixed rate plus 0.1% variable). The Santander Direct ISA Issue 9 is paying 3.3% (2.8% variable rate bonus plus 0.5% variable rate).
I wonder if Halifax is using these lower interest rates to fund their Savers Prize Draw? I’d prefer to be paid a higher rate of interest on my savings, instead of a small chance of being a £100,000 prize winner.
On reflection, I don’t think a few prizes of £100,000 a month can justify the difference in interest rates paid by the Halifax and Santander. I can only assume that the Halifax are crossing their fingers that customers can’t be bothered chasing the highest rates of interest. I wouldn’t bank on that.
Now, the one downside is that the Santander 12 month bonuses on the instant access Cash ISA and eSaver accounts is variable, whereas it’s fixed on the comparable Halifax accounts. Therefore, the Halifax accounts offer more security in the event that interest rates do drop.
Interest rates correct on 22 June 2012.
Update 12 September 2012 – Halifax savings rates continue along lacklustre lines with the Halifax Reward Saver paying an unispiring 2.5% variable with linits on the number of withdrawals to exisring customers with qualifying current accounts. Why bother when anyone can get 3.0% variable in a Santander eSaver Issue 6?