Other Candid sites

Candid Financial Advice
Financial advice for a fraction of the usual cost.

Compare Fund Platforms
The UK's only fund platform comparison site for private investors.

Rating Key
11 StarAwful
21 StarPoor
31 StarOk
41 StarGood
51 StarExceptional

Candid Reviews

| Printable version | A A A |

Santander High Interest Current Account

Current Account
Published 16 July 2010
Helpful? 20
Open Quote Good switching deal if you opt for the Zero Account, but most won't end qualify and end up in the less attractive 'Preferred In-Credit Rate' high interest account. End Quote
Thumbs Up
  • 5% interest and £100 when switching to a Santander current account.
  • Switching offer also applies to the more attractive Zero Account.
Thumbs Down
  • High overdraft rates and charges.
  • High charges when spending or withdrawing money overseas.
  • Better Zero Account only available to Santander mortgage or invesment customers.
Candid Rating
Candid Charges







19.9% authorised, 28.7% unauthorised overdrafts. (see Santander website for others).

Wherever you look these days there seems to be a Santander advert promising £100 and 5% annual interest if you switch your current account to them. Is this a deal too good to miss or is Santander simply trying to bribe you into moving to a mediocre current account?

Let’s start by taking a look at the offer.

The £100 bonus for switching your current account to Santander is paid within three months of opening the account provided you pay in at least £1,000 a month and set up at least one active direct debit (which makes a payment) within 11 weeks. To qualify you must not hold, or have held in the last three months, any current accounts from Santander, Alliance & Leicester, Cahoot or Cater Allen.

The 5% gross annual interest, paid on balances of up to £2,500, is fixed for the first year before falling to 1%. Interest on amounts over £2,500 or, if you pay in less than £1,000 per month, is just 0.1% and this will fall to 0% from 5 October 2010.

This means if you’re lucky enough to maintain a balance of £2,500 over the first year you’ll earn interest worth £125 before tax. Nice. Hold a more realistic average balance of £500 and you’ll earn £25 – ok but not very enticing. Add in the £100 bonus and the maximum upside from opening the account is £225 over the first year. Thereafter the rate of 1% is reasonable for a current account but nothing to write home about.

So the offer to switch looks good over the first year. But what about the current accounts?

There’s a choice of the ‘Preferred In-Credit Rate’, Zero and Reward accounts. The Reward account offers benefits including travel insurance and breakdown cover for £10 a month, an indifferent deal, while the Zero account is competitive but only available to existing Santander mortgage or investment customers. So the Preferred In-Credit Rate account is likely to be the default option for most customers taking advantage of this offer.

Santander reduces the authorised overdraft rate to 0% over the first four months, but it reverts to a hefty 19.9% on this account thereafter. Unauthorised overdrafts are charged at 28.7% with a £25 monthly fee. And try to pay for something when there’s not enough money in your account and you’ll be slapped with a fee of up to £35. The associated debit card charges a currency fee of 2.75% on overseas transactions and you’ll be charged 1.5% (minimum £1.99) when withdrawing cash from a machines or a bank overseas.

All in all, the Preferred In-Credit Rate account is not a very attractive current account if you’re likely to go overdrawn or spend overseas. The fees are quite high and better deals can be had elsewhere. The Zero account is a better bet, If you qualify, as the overdraft rate is 12.9% and there are no fees for unauthorised overdrafts/payments or foreign transactions.

If you qualify for a Santander Zero Account then this is a pretty decent offer to switch across. Otherwise it’s likely you’ll end up in the Preferred In-Credit Rate or Reward accounts. Neither is particularly attractive, reducing the appeal of the switching deal.

Web Link: http://www.santander.co.uk/

If you found this review helpful, please add your vote by clicking here.

Why not write your own review of this product? click here.

Please Note: We display user reviews in good faith and cannot guarantee their authenticity. Never choose providers or products on the basis of these user reviews alone. All information and data shown is as at the date of the review.