Saving moneySantander has shaken up its savings accounts and launched three new fixed rate bonds.

The bonds are for 12-, 18- and 24-month terms, and while the interest rates are competitive, they aren't market leading. Let's take a look at just how they compare.


Fixed rate bonds
The one-year bond pays 2.00% interest on balances of at least £500 and 2.10% when you deposit £200,000.

But if you want a higher rate of interest several other providers have better products on offer.

The opening deposits vary for these. Of the top-paying deals, only Virgin Money asks for a smaller deposit of £1.

Top one year accounts

Account

Rate

Minimum deposit

Access

Bank of London and The Middle East: One Year Premier Deposit Account

2.50%

£25,000

Online

Virgin Money Fixed Rate E-Bond Issue 25

2.40%

£1

Online

First Direct: Fixed Rate Savings

2.30%

£2,000

Online

Shawbrook Bank: One Year Fixed Rate Bond Issue 5

2.25%

£5,000

Online, post

United Bank UK: One Year Fixed Deposit

2.25%

£2,000

Branch, post


18-month bond
Santander has also launched an 18-month bond. This again pays different rates of interest depending on how much money you have in the account. Those savers with at least £500 will get 2.50% while those with £200,000 will get 2.60%.

This one is only available to customers who already have a Santander 123 Current Account, or a 123 Credit Card. But both the current account and credit card cost £24 per year, so you'll need to work out if it's worth paying this monthly sum in return for the interest.

The 18-month bond market is pretty sparse at the moment, but it's possible to get 2.50% with Metro Bank when depositing £500. This one is branch-based though so you can only benefit if you are within reach of a branch.

Bank of London and The Middle East also has an 18-month account paying 2.65%, but this requires a hefty deposit of £25,000.

Two-year bonds
Santander has also launched a two-year bond which pays 2.30% on £500 or 2.40% on £200,000.

Again, there are better deals around. A rate of 3.03% is available on deposits of £1,000 with the Islamic Bank of Britain for example.

The banks and building societies listed below all offer higher rates of interest. But some of these also ask for a larger starting deposit, so might not be suitable for everyone.

The account offers more interest when you have more money stored away. However, if you're prepared to put £200,000 into a savings account you may get a better rate of interest if you opened up an account with a longer term - such as a three- or five-year bond. It's important to remember that the Financial Services Compensation Scheme only protects the first £85,000 you place in any financial organisation in a savings account.

Top two year accounts

Account

Rate

Minimum deposit

Access

Islamic Bank of Britain Sharia-Compliant Fixed Term Deposit 3.00% £1,000 Online, postal

Bank of London and The Middle East: One Year Premier Deposit Account

2.75%

£25,000

Online

BM Savings: Two Year Fixed Rate Bond

2.65%

£25,000

Postal

Virgin Money: Fixed Rate E-Bond Issue 26 2.65% £1 Online

Shawbrook Bank: Two Year Fixed Rate Bond Issue 4

2.50%

£5,000

Online, post

Tesco Bank: Two Year Fixed Rate Saver

2.40%

£2,000

Online, phone


Disappearing accounts
Savers are getting a rough ride at the moment with accounts disappearing regularly. While it's good new accounts are being launched, these from Santander are replacing similar products which were paying a higher rate of interest.

The Spanish bank withdrew a one-year account paying 2.30% on balances of £500, an 18-month bond paying 2.90% and a two-year deal paying 2.50% on the same sum.

But it's not alone - banks across the sector have been following a similar pattern. In fact in 2012 350 top savings accounts were withdrawn, leaving savers with little option to earn interest.



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