Santander takes pole position with best buy 3.50% Cash ISA

Andrew Hagger of Moneynet.co.uk reviews the new Cash ISA launched by Santander. The new Santander Flexible ISA offers a triple whammy for savers with a best buy rate, a guaranteed minimum rate plus the flexibility of unlimited penalty free instant access.

The rate of 3.50% is guaranteed for 12 months, but because the account has been structured to pay 3% above base rate, if the Bank of England decides to increase rates in the next 12 months, Santander customers will benefit from such a move.

Savers have really been under the cosh over the last 18 months, having to contend with poor rates and soaring inflation, so let's hope this attractive deal spurs other ISA providers to retaliate.

When you weigh up that the best rate for a 2 year fixed rate ISA is 3.60% with Aldermore and the best 1 year fix at 3.33% from Bank of Cyprus UK, it emphasises just how competitively priced this  account is.

The major downside of this deal is that it doesn't allow transfers in, so if you've got funds accumulated from previous tax years, you'll need to look elsewhere.

This account is likely to prove popular and if previous ISA seasons are anything to go buy, it may not be around for long.

This is how much you could earn with this ISA over the next 12 months.

£5,100 at 3.5% will provide a tax free interest return of £178.50 over the course of a year
£3,600 at 3.5% provide a tax free interest return of £126.00 over the course of a year