Santander launches 3.1 per cent interest rate deal

One provider of personal and business bank accounts in the UK has recently launched a 3.1 per cent interest rate savings offering, turning up the heat in the competition for savers’ cash.

Financial service providers are doing their best to entice savers to take up new savings accounts deposits as a way to drive revenues.  This has become especially prevalent lately as their other main source of funding, money market accounts, have proved highly unreliable due to stock market uncertainties.

Focussing for the most part on the variable easy access account, the savings battle heated up recently as the top of the table became home to two offerings.  Newcastle Building Society’s 3.15 per cent saver had to shove over and share the spotlight with the Poppy Online Saver from Coventry BS last week, but both accounts only offer up to four withdrawals within a 12 month period without risking a precipitous rate drop.

The tactic of punishing savers for taking out cash from their ‘easy access’ accounts has become a tactic many banks and building societies have begun to employ.  As these financial institutions seek to stuff their coffers, they want to discourage savers from regularly withdrawing their cash – and with the Retail Prices Index currently at 5 per cent, many savers are tempted to raid their savings to make ends meet with the increased costs of living.

Next in line on the best buy tables is the 3.11 per cent NetSaver account from Derbyshire Building Society, and the first true ‘instant access’ account.  Derbyshire, which is part of Nationwide, the largest building society in the UK,  has no penalty on withdrawals.

However, Santander’s new offering is the first rumblings of what could be evidence that major banks are throwing their hats in the ring for savers’ deposits.

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