Santander will increase interest on its current account 123 from the end of the month. The bank will increase it by 0.2 percentage points, to 0.5%.
The changes come into effect on March 28. Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It’s good to see Santander raise its current account rate 123 to 0.5% as the deal also comes with an excellent set of incentives, including cashback on bills and expenses, so it’s appealing to spenders and savers alike.
“However, the interest rate was slightly higher a year ago (0.6%) before falling to 0.3%.
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“At present, for a monthly fee of £4, consumers can earn 1% to 3% cashback on certain household bills and Santander home or life insurance premiums (up to £15 per month).
“Santander is also offering Switches £140 in cash and as the cost of living rises consumers may be tempted to grab a free cash benefit but it is imperative that they assess the overall package of any account before to engage and make sure it suits their needs.”
Highlighting other options people might consider, Ms Springall pointed to the Virgin Money M Plus account, which she says has an easy-to-access, market-leading account paying 1% interest.
“Virgin Money’s M Plus account offers decent benefits alongside the linked M Saver account, but as with any package, the benefits are useless unless someone uses them regularly,” she said.
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