Santander Edge review: Earn 6% interest and 1% cashback

Is this 123 replacement account from Santander any good?

The Santander Edge current account offers cashback on spending and bills and interest on savings. There is a £3 monthly fee, but Santander currently pays £36 — a year’s worth of fees — to new customers. Here’s how it works, and how it compares to other accounts such as the Santander 123 account it’s replacing and Chase Bank.

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What is the Santander Edge account?

This current account from Santander is open to new and existing customers. It replaces the 123 Lite account for new customers.

You can earn 1% back on both spending with your debit card and direct debits on your bills. However, they’ll be limited to certain categories. There’s also a £10 limit per month on each form of cashback, so a £20 max combined, or £240 a year.

The savings rate decreased in August 2024 from 7% to 6%. However, that’s just for a year. After 12 months it drops to 4.5%. It’s also only paid on balances up to £4,000.

This account isn’t free — it costs £3 a month, or £36 a year, but you can currently get a year for free. 

This is £1 more than the Santander 123 Lite was, but £2 less than the Santander Edge Up account.

Unlike with reward accounts at other banks, there’s no way to avoid the fee (after the first free year), so you need to take it into account when working out how much you’ll make from the cashback and savings interest.

Santander Edge & cashback on bills

You’ll earn 1% on selected household bills. These are the same broad categories covered by the Santander 123 accounts, though they are lower rates on gas, electricity and water. There’s no bonus cashback on Santander products like mortgages, which is only available to holders of the now closed Santander 123 account.

• Council Tax bills (including Rates in Northern Ireland) 
• Gas and electricity bills 
• Water bills 
• Mobile and home phone bills, broadband and paid-for TV packages 

How much cashback will you make?

With the bills, it’s the same amount required to hit the £10 cap, and I think that’s incredibly unlikely. Even with energy bills on the rise, and Council Tax set to follow, the average house in band D will be spending around £400 a month come next spring.

After that, the vast majority of households would need a massive pay TV bill and expensive mobile phone contract to get even close to a grand each month.

If you’re savvy with those latter bills (by axing pay TV and going SIM-only on your phone), they’d amount to less than a tenner combined. Put broadband at £30 (you can get it for less) and water at £40 and you’re maybe nudging £500 combined. So I’d expect average households who have shopped around to get £5 at most from this part, or £60 a year.

Though of course, you should factor in the monthly fee against the total amount you make from this account. I think it makes sense to subtract the total here as you’re not likely to earn this money from another source. But do this and it means your profit could be as low as £2 a month, or £24 a year after the first year.

How does it compare to other ways to get cashback on bills?

If you already have a Santander 123 Lite account, or even the standard 123 (both are closed to new customers) then I’d 100% stick with that. You’ll get higher rates on water (3%), gas (2%) and electricity (2%) bills.

If you don’t have that one, then your other main option is the Edge Up account, that has a slightly higher cap on cashback of £15 a month – though you’ll pay £5 a month.

For that extra £2 a month you’d need to have incredibly high bills to gain the extra cashback each month. Unless that’s possible, the Edge has the edge.

You could look at using a cashback card instead, with Chase offering 1% for a year (capped at £15 a month) and American Express’s Nectar card offering the same (but as Nectar points). You might find Council Tax excluded, while you’d lose out on a direct debit discount from energy bills.

Santander Edge and Debit card cashback

You’ll also earn 1% from using your debit card – but only not on every purchase. The money is paid on transport and grocery spending. Here are the qualifying subcategories:

Transport

• Service stations and UK petrol stations 
• Automated fuel dispensers 
• Suburban and local commuter passenger transport including ferries 
• Passenger rail journeys 
• Bus journeys 
• Electric vehicle charging points 

Groceries

• Supermarkets and grocery stores 
• Convenience stores 
• Food markets 
• Specialty food stores 
• Vending machines 

How much cashback will you make?

To get the £10 a month on debit card spending, you’d need to spend £1,000 a month in those categories. Supermarket spending on its own won’t hit this mark for most households, though filling up a car each month will improve your return.

It’s obviously going to be easier to max out this category for those who commute – though if you buy an annual season ticket you’ll miss out.

I’d say expect a spend of £500 a month, so £5 cashback, and anything more is a bonus.

How does it compare to other cashback cards?

Frankly I wouldn’t bother. You can earn 1% with fewer restrictions on eligible categories from Chase Bank, and there’s not fee attached.

Or when it comes to supermarkets and most travel expenditures you can use the highest paying Amex Nectar, which again can be used on other purchases – as long as you’re happy to receive the money back as Nectar points. There’s a £25 annual fee with this card from year two onwards, but other Amex offers should more than cover this.

Santander Edge & interest on savings

If you have the Edge current account you’ll be able to open up a Santander Edge saver. This 6% rate contains a 2.5% bonus for 12 months, so it’ll drop to 4.5% after a year (though as the rate is variable it could go up or down in this time).

The interest is also only on balances of up to £4,000. Anything in the account above this will earn nothing at all.

As this table shows, those who don’t cover the monthly fee via cashback elsewhere in the account will want to have at least £600 saved to avoid making a loss. They’ll also want to have more than £3,000 to beat the higher easy access accounts elsewhere at the time of writing.

Amount saved	Annual Interest	Interest after £36 fee	Effective interest rate
£600.00	£36.00	-£6.00	0.0%
£1,000.00	£60.00	£24.00	2.40%
£1,500.00	£90.00	£54.00	3.60%
£2,000.00	£120.00	£86.00	4.3%
£2,500.00	£150.00	£114.00	4.56%
£3,000.00	£180.00	£144.00	4.80%
£3,500.00	£210.00	£174.00	5%
£4,000.00	£240.00	£204.00	5.10%

Though it’s only one Saver per person per current account, you can get two with a joint Edge current account, which would mean you can save up to £8,000 at this rate.

You could even have a joint account and a personal account each, giving you four Edge savers in total. I’ve written more about this hack in my separate review of the Edge Saver.

Overall it’s a decent rate, and certainly something that makes it worth considering multiple, let alone one, Edge current accounts.

Santander Edge vs Santander 123 Lite account?

With the launch of the Edge account, you’re no longer able to open a 123 Lite account. This is a real shame as that offered higher cashback rates on bills. However existing 123 Lite customers can keep their account, and I’d suggest they do rather than switch to the Edge account.

Santander Edge vs Santander Edge Up

The Edge Up is a souped up version of the Edge. It costs £2 more each month, and in return you can earn up to £15 cashback a month and earn interest on balances of up to £25,000, albeit at a lower rate.

I’d ignore the savings on the Edge Up account as that rate can easily be beaten in a number of places, so thanks to the increased savings on the Edge, it’s really not worth choosing the Edge Up over the Edge

Is the Santander Edge any good?

Santander Edge Up offers