No advertising, no bias, no hidden agenda

New 3.15% savings rate from Alliance and Leicester£1 minimum balance with internet-only access

05 July 2009

Savings

Spanish banking giant Santander is continuing its assault on the savings market with its latest table-topping rate available under its Alliance and Leicester brand.

The internet only Online Saver Issue 5 promises to give 3.15% which matches that offered by the Birmingham Midshires building society. Alliance and Leicester says the rate is open to both new and existing customers. 

See our savings accounts Best Buys for other great savings deals.

 

Top savings rate not all it seems

Although the headline savings rate is high, the account includes a tiered bonus of between 1.65 and 2.65% depending on your balance. That means that customers will only get the high rate of 3.15 per cent until August 2010, after which rates will drop as low as 0.5% for those with less than £25,000.

James Daley, editor at Which? Money, said: 'A&L's new account is offering a great headline rate of 3.15%, but savers need to put a reminder in their diaries to switch out of this account in a year's time. Although bonuses are not uncommon in the savings market, it is unusual to see such large bonuses. This means that in August next year, savers will be earning poor rates as low as 0.5%. Only open this account if you know that you'll have the discipline to move your money again in 13 months time.'

Santander has launched a concerted attack on the UK savings market of late. In June it announced that a savings rate of 6% would be available to new customers of Alliance and Leicester's Premier direct and Premier 50 accounts.

pound coins

Which? Money Email

Subscribe to the Which? Money Email for independently reviewed Best Rates and impartial expert advice plus the latest money news and money saving tips.

Or for money saving tips and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. 

If you have an older web browser you may need to copy and paste this link into your newsreader: http://www.which.co.uk/feeds/reviews/news.xml . 

Find out more about RSS in the Which? guide to news feeds.