Rory Mcllroy can get you a bonus on your savings if he wins a Major golf tournament between now and May 2015. But how does the Santander Major ISA compare without the gimmick?
Santander has brought back its Major ISA.
The two-year fixed rate deal will pay 2.80% to new customers or 3% if you are a 123 current account or 123 credit card holder.
As well as an attractive rate the account also comes with the promise of an extra 0.1% bonus pegged on the golfing success of Santander brand ambassador Rory Mcllroy within the term of the deal.
How the Major ISA works
The Santander Major ISA will pay a one-off 0.1% bonus if Mcllroy manages to win an eligible Major golf tournament over the two-year fixed term.
The eligible events include:
- The Masters in April 2013, 2014 and 2015
- The US Open in June 2013 and 2014
- The Open Championship in July 2013 and 2014
- The US PGA Championships in August 2013 and 2014
So that’s nine events that could trigger a bonus on your savings. If you weren’t interested in golf before I bet you are now!
Bear in mind that accounts opened after the 11th of April 2013 won’t be able to count a Masters win in April 2013 as the tournament would have already started. So if you want to boost your chances get your application in before then.
Will I get the bonus?
When Santander first launched the Major Cash ISA back in April 2012 I was a bit sceptical of the gimmick.
But just four months after the special offer on the Major ISA was triggered when Rory Mcllroy won the PGA Championship. Read: Rory Mcllroy win triggers Santander ISA bonus for more.
So those who took out the 2012/2013 two-year fixed Major ISA at 4% will get an extra 0.1% bonus when their deal matures. It’s not a lot but every little helps in a dire savings market.
But what are Mcllroy’s chances now?
Well at the moment Mcllroy is ranked world number one and he has two Major wins under his belt; the US Open in 2011 and the PGA Championship in 2012. So he sounds like a safe bet to me.
That said being ranked the top player in the world is no guarantee of Major success. So even if there is a decent chance you shouldn’t bank on getting that 0.1% interest bonus and focus instead on whether it's the best place for your savings.
So let’s take a look.
How it compares
Here’s how the rates stack up for two-year fixed rate ISAs. I have listed the top five at the moment.
|
Account |
Interest Rate (AER) |
Minimum Deposit |
Notes |
|
Santander Major ISA |
2.80% |
£0+ |
You get a rate of 3% as a 123 customer. Transfers in allowed. |
|
Halifax ISA Saver Fixed |
2.50% |
£500 |
Transfers in allowed. |
|
Nationwide Two-Year Fixed Rate ISA |
2.35% |
£1 |
Transfers in allowed. Only available in branches. |
|
Derbyshire BS Fixed Rate ISA Issue 63 |
2.35% (until 30th April 2015) |
£100 |
Transfers in allowed. Only available in branches. |
|
Dunfermline Fixed Rate Cash ISA Issue 54 |
2.35% (until 30th April 2015) |
£100 |
Transfers in allowed. Only available in branches. |
As you can see the Santander Major ISA pays 0.3% more than the next best two-year fix from Halifax and doesn’t have a minimum deposit restriction. This is even without the potential 0.1%bonus. So there’s no question that the Major ISA is the best in its class at the moment.
However, you don’t have to lock your money away for two years to get access to this rate. The Coventry Building Society has a 60-day notice ISA which pays 2.80% too and only requires £1 to open.
That said the 2.8% rate you get with the Coventry Notice ISA includes a 0.6% fixed rate bonus, which will disappear after 12 months. It also doesn’t accept transfers in, so not great for seasoned ISA investors with pots to move on. Read more about catches like these in: Top Cash ISA catches to watch out for.
Getting 3% tax free
You will need to lock your money away for five years to get a rate above 3% on a Cash ISA at the moment, which isn't ideal as rates might creep back up in that time.
But to get the very top rate of 3% on offer from the Santander Major ISA you will just need to become a 123 customer.
That’s not such a big ask when you consider the perks.
The Santander 123 Credit Card offers 1% cashback on supermarket spends, 2% when you shop in department stores and 3% on travel spends in petrol stations or on National Rail and TFL tickets.
Elsewhere the Santander 123 Current Account will give you up 3% cashback on certain direct debits as well as pay up to 3% on credit balances. The rate is so good it is starting to challenge the dismal savings accounts out there. Read: Why current accounts are better than savings accounts for more.