I noticed that Santander have introduced another savings account, a two year fixed rate Cash ISA paying 2.5%, exclusively for customers who hold a Santander 123 Cashback Current Account or a Santander 123 Credit Card. The account accepts transfers from existing Cash ISAs and has a minimum opening balance of £500.

The 2.5% rate of interest paid on the Santander Two Year Fixed Rat ISA is a market leader, the next best rate I could find on a two year fixed rate ISA was 2.3% with the Halifax.

The Santander two year fixed rate Cash ISA is hot on the heals of another 123 customers only product, the 18 month fixed rate bond which pays a competitive 2.5%.

It appears to me that Santander is making a concerted effort to hook in customers to its 123 Current Account and Credit Card. Well they’ve managed to lure me. I’ve opened a 123 Current Account, mainly to access the 3% (variable) rate of interest currently paid on deposits of £3,000+ (up to a maximum of £20,000).

I’ll be on the lookout for the best Cash ISA rates at the start on the new tax year on 6 April 2013, If Santander are offering good rates to 123 customers, I may be bringing more cash their way.

Interest rates correct on 4 February 2013.

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