Santander Edge review: Earn 7% interest and 1% cashback – Be Clever With Your Cash

Is that this 123 alternative account from Santander any good?

This present account affords cashback on spending and payments and curiosity on financial savings, although you’ll should pay a month-to-month charge. Right here’s the way it’ll work, and the way it compares to accounts such because the Santander 123 and Chase Financial institution.

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What’s the Santander Edge account?

This present account from Santander is open to new and present clients. It replaces the 123 Lite account for brand spanking new clients.

You’ll be capable of earn 1% again on each spending along with your debit card and direct debits in your payments. Nevertheless, they’ll be restricted to sure classes. There’s additionally a £10 restrict per 30 days on every type of cashback, so a £20 max mixed, or £240 a yr.

The financial savings fee elevated in August 2023 from 4% to 7%. Nevertheless that’s only for a yr. After 12 months it drops to 4.5. It’s additionally solely paid on balances as much as £4,000.

This account isn’t free. It’ll price you £3 a month, or £36 a yr. That is £1 greater than the Santander 123 Lite was abut £2 lower than the Santander Edge Up account.

Not like with reward accounts at different banks there’s no technique to keep away from the charge, so it’s essential to take it under consideration when understanding how a lot you’ll make from the cashback and financial savings curiosity.

Santander Edge & cashback on payments

You’ll earn 1% on chosen family payments. These are the identical broad classes lined by the Santander 123 accounts, although they’re decrease charges on gasoline, electrical energy and water. There’s no bonus cashback on Santander merchandise like mortgages, which is simply obtainable to holders of the now closed Santander 123 account.

Council Tax payments (together with Charges in Northern Eire) Gasoline and electrical energy payments Water payments Cellular and residential telephone payments, broadband and paid-for TV packages 

How a lot cashback will you make?

With the payments, it’s the identical quantity required to hit the £10 cap, and I feel that’s extremely unlikely. Even with vitality payments on the rise, and Council Tax set to observe, the common home in band D will likely be spending round £400 a month come subsequent spring.

After that, the overwhelming majority of households would wish a large pay TV invoice and costly cell phone contract to get even near a grand every month.

In the event you’re savvy with these latter payments (by axing pay TV and going SIM-only in your telephone), they’d quantity to lower than a tenner mixed. Put broadband at £30 (you will get it for much less) and water at £40 and also you’re perhaps nudging £500 mixed. So I’d count on common households who’ve shopped round to get £5 at most from this half, or £60 a yr.

Although in fact you might issue within the month-to-month charge in opposition to the full quantity you make from this account, I feel it is sensible to subtract the full right here as you’re not more likely to earn this cash from one other supply. However do that and it means your revenue might be as little as £2 a month, or £24 a yr.

How does it examine to different methods to get cashback on payments?

If you have already got a Santander 123 Lite account, and even the usual 123 (each are closed to new clients) then I’d 100% follow that. You’ll get greater charges on water (3%), gasoline (2%) and electrical energy (2%) payments.

In the event you don’t have that one, then your different important choice is the Edge Up account, that has a barely greater cap on cashback of £15 a month – although you’ll pay £5 a month.

For that further £2 a month you’d have to have extremely excessive payments to realize the additional cashback every month. Except that’s potential, the Edge has the sting.

You possibly can take a look at utilizing a cashback card as a substitute, with Chase providing 1% for a yr (capped at £15 a month) and American Specific’s Nectar card providing the identical (however as Nectar factors). You may discover Council Tax excluded, whilst you’d lose out on a direct debit low cost from vitality payments.

Santander Edge and Debit card cashback

You’ll additionally earn 1% from utilizing your debit card – however solely not on each buy. The cash is paid on transport and grocery spending. Listed below are the qualifying subcategories:

Transport

Service stations and UK petrol stations Automated gasoline dispensers Suburban and native commuter passenger transport together with ferries Passenger rail journeys Bus journeys Electrical automobile charging factors 

Groceries

Supermarkets and grocery shops Comfort shops Meals markets Specialty meals shops Merchandising machines 

How a lot cashback will you make?

To get the £10 a month on debit card spending, you’d have to spend £1,000 a month in these classes. Grocery store spending by itself received’t hit this mark for many households, although filling up a automotive every month will enhance your return.

It’s clearly going to be simpler to max out this class for individuals who commute – although in case you purchase an annual season ticket you’ll miss out.

I’d say count on a spend of £500 a month, so £5 cashback, and something extra is a bonus.

How does it examine to different cashback playing cards?

Frankly I wouldn’t trouble. You may earn 1% with fewer restrictions on eligible classes from Chase Financial institution, and there’s not charge hooked up.

Or in the case of supermarkets and most journey expenditures you need to use the best paying Amex Nectar, which once more can be utilized on different purchases – so long as you’re joyful to obtain the cash again as Nectar factors. There’s a £25 annual charge with this card from yr two onwards, however different Amex affords ought to greater than cowl this.

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Get a £17 Quidco bonus (new members solely). Extra particulars

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+ Get a £17 Quidco bonus (new members solely). Extra particulars

Santander Edge & curiosity on financial savings

In case you have the Edge present account you’ll be capable of open up a Santander Edge saver. This 7% fee accommodates a 2.5% bonus for 12 months, so it’ll drop to 4.5% after a yr (although as the speed is variable it might go up or down on this time).

The curiosity can be solely on balances of as much as £4,000. Something within the account above this may earn nothing in any respect.

You’re allowed just one Edge saver per Edge present account, however there’s a approach you may be ale to get extra. Joint account holders can get one saver every, and you might every have a private account too. So between the 2 of you that might be 4 Edge savers. Nevertheless that might be three a number of the charge.

How a lot curiosity will you earn within the first yr?

Assuming you’re accounting for the charge in opposition to the cashback, and you’ve got the total £4,000 saved within the account for a yr, you’ll make £280 in curiosity within the first yr. That’s fairly first rate proper now.

One Edge account with one Edge Saver

However in case you didn’t issue within the charge in your cashback charges (maybe you have already got the 123 Lite account), then you definitely’ll want so as to add them right here. That £36 a yr cost reduces the efficient fee you obtain. Listed below are some examples for the primary yr.

Clearly you’ll wish to keep away from having lower than £500 in there a it’s a internet loss. I’d counsel you additionally wish to look elsewhere when you’ve got £2,000 or much less in financial savings.

One joint Edge account with two Edge Savers

In fact when you’ve got the joint account as a substitute you possibly can open two Edge saver accounts. Then the speed begins to enhance, as this desk beneath reveals (the quantity is the cumulative quantity throughout two savers however one charge paid)

One private Edge and one joint Edge account with three Edge Savers

You may construct on this once more when you’ve got one other £4,000 to avoid wasting by including a private account alongside the joint account to open one other Edge Saver – although you’ll be doubling the charge to £72 a yr.

Two private and one joint account with 4 Edge Savers

Or in case you actually go to city – and pay the charge 3 times with a joint account and a private account every you possibly can open up a complete of 4 Edge Savers.

How does it examine to different financial savings accounts?

Whenever you examine the headline rates of interest it’s a very first rate fee, that’s presently nicely above the remaining. Even in case you issue within the £36 charge you’ll be beating the remaining – so long as you save greater than £2,000 in there.

And in case you add in further present accounts to present you entry to extra Edge Savers you’ll nonetheless be above 6.2% on balances as much as £16,000.

Although don’t neglect the tax-free Private Financial savings Allowance is simply £1,000 or £500, relying in your tax bracket – and that’s solely on earnings earlier than the charge.

Plus, keep in mind that 7% fee is just for 12 months. When it drops to 4.5% there are a selection of finest easy-access accounts that beat it, together with Tandem’s 5% quick access account.

Santander Edge vs Santander 123 Lite account?

With the launch of the Edge account, you’re now not in a position to open a 123 Lite account. This can be a actual disgrace as that supplied greater cashback charges on payments. Nevertheless present 123 Lite clients can maintain their account, and I’d counsel they do fairly than swap to the Edge account.

Santander Edge vs Santander Edge Up

The Edge Up is a souped up model of the Edge. It prices £2 extra every month, and in return you possibly can earn as much as £15 cashback a month and earn curiosity on balances of as much as £25,000, albeit at a decrease fee.

I’d ignore the financial savings on the Edge Up account as that fee can simply be overwhelmed in quite a lot of locations, so because of the elevated financial savings on the Edge, it’s actually not value selecting the Edge Up over the Edge

Is the Santander Edge any good?

Andy’s Evaluation

Although it’s ticking all the correct bins, with cashback and excessive rates of interest, the spending restrictions trigger it to fall in need of rivals that provide the identical advantages.

It’s value a glance is the cashback on payments too – however provided that you missed out on the 123 Lite or 123 accounts. in that case I’d say the Edge continues to be value a glance because it’s higher to be incomes one thing in your payments than nothing.

However the place it’s abruptly been one to significantly take into account is the elevated financial savings fee of seven%. Even in case you issue within the charge (which is able to hopefully be worn out by cashback on payments), it’s nonetheless the best paying quick access account proper now for balances above £2,000. Although keep in mind that’ll solely be on as much as £4,000 and just for 12 months.

It might be particularly profitable for {couples} opening a joint account for his or her payments and every opening a Edge Saver, that means they’ll get that 7% on balances as much as £8,000.

Quidco & TopCashback: As much as £30 once you open an Edge account

In the event you apply for the Santander Edge account through cashback websites Quidco or TopCashback there’s usually an additional you possibly can earn on prime, usually between £20 and £30.

In the event you’re not already a buyer of both web site then ensure you join a welcome supply first, value as much as £17 – although this will’t be utilized in conjuction with the Santander supply so that you’ll have to make a purchase order elsewhere first.