Santander account that offers bumper 6% interest rate even after BoE cut | Personal Finance | Finance

Santander is offering a savings account with a 6% interest rate for the first 12 months despite the Bank of England’s reduction in interest rates. The rate applies to accounts with as much as £4,000 in them and could see customers earn £60 after one year and £102 after two years when £1,000 is held in the account.

The Santander Edge Saver could be a useful way for savers to make their money work harder and shows the value of shopping around for the best value savings account. The Bank of England’s decision to reduce interest rates to 4% could see some savers lose out on the amount of interest they earn on their money. The base rate helps to dictate how expensive it is for people to take out a mortgage or a loan, but savings rates are also linked to the figure and will now be reduced over the coming weeks as a result of the cut.

Many variable and tracker savings accounts closely follow the base rate which means customers with these accounts face a drop in the amount of interest they will earn thanks to the cut.

But if you open a fixed rate savings account, you won’t be affected by any drops to the base rate, so you can effectively lock into a higher rate to get better returns on what you save.

The change in interest rate has been hailed by the Chancellor for the impact it could have on mortgage payments but other experts have warned that it is unlikely to bring immediate relief.

Tamsin Powell, Consumer Finance Expert at Creditspring, said: “People are still facing high living costs and stretched budgets – and any small shift in the base rate is unlikely to bring immediate relief.

“We know that borrowing has become more expensive in recent years, but even as interest rates begin to fall, affordable credit will remain out of reach for millions.

“For those without a financial cushion, even a minor unexpected expense – a broken appliance, car repairs, or back-to-school costs – can still cause serious stress.

“It’s vital that we don’t assume a rate cut fixes the problem. What people need is access to fair, simple financial support that doesn’t push them further into debt.

“At the same time, improving access to financial education is essential, especially for younger people and those new to borrowing. Knowing how credit works, what good borrowing looks like, and how to avoid costly mistakes can make all the difference when money is tight.”