Savings Accounts

Are Santander savings accounts any good?

Santander has long been a stalwart of the British High Street. It has garnered attention for its customer service and range of current bank accounts, cash ISAs, and savings accounts in recent years. Are their savings accounts any good?

 - 7 Min Read
Last updated and fact checked:
Are Santander savings accounts any good?

Are Santander bank savings accounts any good? FAQs

  • Which UK bank is best for savings?

    There will never be one lasting answer to this question. Banks are continually changing the rates they offer on savings accounts as a way to attract new customers. Plus, so many savings accounts offer comparatively good introductory rates that then fall off a cliff after a set amount of time, making comparing savings accounts difficult.

  • Which bank has the best savings rate right now?

    This is a difficult question to answer. While headline interest rates may be higher at one bank over another, the terms and conditions on certain accounts may not make them a viable option for customers. Therefore, you should consider all savings accounts and investments in light of your circumstances to determine whether they are the best savings accounts for you.

  • Should I save or invest?

    Again, whether you should save or invest is down to your circumstances. It could be that you need to plug a hole in your retirement fund to help improve your pension. Presently, with historical returns on stock markets being an average of 10% a year, it may be that investing is a better route to take as savings accounts offer such low rates at the moment. But, that does come with added risks.  

  • How do I find a savings account?

    Finding a savings account is increasingly possible with some research through the internet to compare rates between banks and building societies. However, a financial advisor may be a help you find a savings account as they will be able to suggest savings accounts to you bearing in mind your nuanced needs and requirements. As well as looking at traditional savings accounts, you should also consider competitive rate ISAs, which allow you to earn interest tax-free.

Editorial Note: We earn a commission from partner links on Pension Times. Commissions do not affect our writers’ or editors’ opinions or evaluations. Read our full affiliate disclosure here.

Santander is a big bank in the UK. Since starting its life over here from sunny Spain in 2004, when acquiring Abbey National, it went on to take over Bradford & Bingley in 2008 and Alliance & Leicester in 2009. Santander soared in popularity thanks to its 123 account and 123 Lite account. We detail the benefits and differences of those accounts below, either of which you will need to open one of Santander's savings accounts.

But before you open one of their current accounts to access these savings accounts, we need to ask: are Santander's savings products any good? Can they help you build your wealth and make your retirement one that offers financial freedom? Knowing the answers to those questions will help you compare them to other types of savings accounts on the market.

Discover stocks and shares ISAs from the UKs leading providers. Click on your chosen provider to get started!

Types of Santander savings accounts

Opening one of the below savings accounts should only ever be done when considering the benefits and drawbacks of each alongside your circumstances. So be aware of your needs, circumstances, and investment objectives to ensure that if you open one of these accounts, it helps you work towards your aim.

Regular eSaver

As of September 2021, Santander's Regular eSaver account offers a fixed interest rate of 0.50% AER for 12 months. Existing customers can transfer a maximum of £200 a month into their savings account from their Santander current account. It is possible to fund the account from another current account outside of Santander. However, Santander reserves the right to change your account into an Everyday Saver at any time should you choose to fund it this way.

While you can't get a debit card or set up direct debits from a Regular eSaver, funds can be withdrawn into a Santander current account when needed. You can do all that through Santander's online banking feature or mobile banking app. If you do not make any withdrawals and pay in the maximum amount of £200 a month for 12 months, you should earn £6.50 in interest, depending on the standing order date.

If you have stopped working or are nearing retirement, there are several pros and cons to the Regular eSaver. The main advantage is that it is low risk. Your funds are all but guaranteed not to lose their value. However, they also will not gain much value either. And, as you can only invest up to £2,400 a year with no option to make additional deposits, your wealth may not grow as required. That said, the low monthly amount you need to transfer means this product is at least an option for many. You may as well earn some interest rather than let funds languish in a current account, not doing anything.


Santander's eSaver account is similar to its regular eSaver, with online banking available. And, while it only offers 0.05% AER for 12 months like the regular eSaver, you are not limited to how much you have to save each month. You can save anything from your minimum £1 opening deposit up to £2million in total in this savings account over the 12-month term. An eSaver account also allows easy access to your funds with no penalty charges.

The pros and cons of this account are common ones characterising many savings accounts while the Bank of England base rate is so low. So even though Santander's eSaver is subsequently exceptionally low at 0.05%, it reflects many other savings rates available. You may find a higher rate of interest if you shop around, however.

That said, Santander's eSaver will undoubtedly attract customers to it as such a large or small amount can be saved within this account type. It means it is accessible for many different income ranges and first-time savers. You should always be able to open this account and save any nest egg you have put aside for the future. However, as of September 2021, inflation is higher than for years, far higher than this account's 0.05% interest rate, making it hard to outrun and thus weakening your purchasing power.

Everyday Saver

Santander's Everyday Saver could be worth considering if you want to manage your account through a branch or telephone. Managing accounts at a branch is slowly but surely becoming less common. As a result, those who are not tech-savvy may struggle to find accounts that aren't managed online.

Account holders can get a cash card for their Everyday Saver so they can withdraw from an ATM when they need to.

An Everyday Saver allows you to save up to £2million, which means it can appeal to many different people with various savings amounts. If you choose to open a Santander Everyday Saver, you can have flexible and instant access and get 0.01% a year AER.

And perhaps therein lies the problem—a 0.01% AER just a little better than nothing. So while you gain the ability to access or manage this account with the help of branch staff, it does come at a cost. And, with inflation starting to take hold, making the most of your savings is critical - particularly at the end of your career or beginning of your retirement. Inflation can quickly eat into all your hard-earned money and investment returns. That said, it is good to see a savings account with penalty-free access and with such a high maximum amount.

Fixed Term Bonds

Fixed-term bonds are often a potential option for those happy to lock their money away for a set period. The payoff for that is a higher, agreed interest rate. As of September 2021, Santander offers between 0.1% and 0.2% AER, depending on the term. The rate you receive will also depend on whether you are a Santander Select customer or a 123 customer. These bonds allow you to save from £500 to £2million. However, funds cannot be drip-fed into a bond, and no withdrawals or account closures are permitted outside the fixed term agreed upon from the outset.

The benefits of fixed-term bonds are clear. The interest rate you receive is higher than most of Santander's other savings products. You can earn that interest on sizable amounts if you have the funds available and can lock those funds away for a fixed term. That may not be possible if you recently retired or are close to retiring and will need those funds to live on when you no longer receive a salary. However, bonds have long been considered a low-risk investment. As such, you can be confident you will receive your initial investment back at the bond's maturity date.

What are the benefits of a Santander 123 account?

A Santander 123 account offers several advantages that may make it suitable for your everyday banking.

Firstly, the account offers up to 3% cashback on household bills. Cashback is capped at £5 cashback in each tier. So, for example, you can earn 1% cashback on council tax bills as well as mobile and home phone bills, broadband and TV packages in addition to Santander monthly mortgage payments. Then, you can earn 2% cashback on gas and electricity bills and some Santander insurance products. Finally, this account pays 3% cashback on water bills.

All that can add up to a few hundred pounds a year, though you will have to pay £4 a month for this account. You can also earn 15% cashback on various Retailer Offers and take advantage of any savings products that require a Santander current account. As of September 2021, the account offers 0.3% monthly interest on balances up to £20,000.

Overdrafts are also available with these accounts.

What is the difference between Santander 123 and 123 Lite?

There are two differences between the Santander 123 and Santander 123 Lite current accounts. Firstly, with Santander 123, you earn interest; with the 123 Lite account, you do not. For that reason, the monthly fee for each account is different. The Santander 123 costs £4, and the 123 Lite costs just £2. However, both offer the same cashback benefits.

These figures may make you prefer one account over the other. For example, it could be that the interest earned on a current account balance easily makes the £48 a year fee for the account worthwhile. However, as the interest rate on the account is at historical lows (it used to be 1.5%), you may prefer the £24 a year fee, given you get the same cashback bonus. In addition, you will pay many of the bills that qualify for cashback throughout retirement. Therefore, this account can be a good way of reducing your bills overall when you start to rely on your pension.

Santander savings accounts

Santander's savings accounts may - at a headline rate anyway - seem to offer pretty miserly looking interest rates. However, they are pretty indicative of the market. Savings rates have been low for years and fell even lower throughout the pandemic. So while Santander's savings accounts may not be outstanding, they could be the best savings account for you - depending on your circumstances.

Image Credit: Paulo Scalfoni at Pexels

The content on is provided for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, you should consult a financial adviser that is registered with the Financial Conduct Authority. Any references to products, offers, rates, and services from third parties or those advertised are served by those third parties and are subject to change. We may have financial relationships with some of the companies mentioned on this website. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors. We are not regulated by the Financial Conduct Authority to provide advice, to act as an authorised introducer, or to otherwise sell any financial services or products. However, we endeavour to only link to and highlight brands that are authorised and regulated by the Financial Conduct Authority and/or the Prudential Regulation Authority, and where your money will be protected by the Financial Services Compensation Scheme should you choose to buy a product or service from that particular brand.
See More