A financial expert has heaped praise on a new savings account launched by a major bank. Santander revealed on Tuesday that it was unveiling a new account offering an impressive 8% interest rate.

Customers will benefit from that rate for the initial 12 months before a 5% bonus rate is removed and it reverts to 3%. The account is available to all customers, Santander confirmed, with no penalties imposed for making withdrawals.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Santander has shot to the top of the market with its new Regular Saver paying 8% AER, incredibly eye-catching for those looking to gradually build their savings pot. The 8% AER does include a 5% bonus for 12 months.

“Unlike other regular savers on the market that revert to a flexible saver earning a much poorer return, it will continue for another year paying 3% AER. The account allows savers to put away £200 every month, plus make unlimited withdrawals.

“It is great to see the account made available to both new and existing current account customers, including its fee-free Everyday option. Those who do want to switch their bank account to Santander can currently get £180 as a reward, when they use the Current Account Switch Service (CASS).

“The CASS moves over any balance and redirects both standing orders and direct debits to a new account. It is never too late for consumers to start putting some cash aside for any future goals, as those who save little and often can feel more in charge of their financial wellbeing.

“Building an emergency fund or saving for a specific goal is simple and easy to do and there are plenty of accounts designed for various needs. Regular savings accounts are ideal for slowly building a pot as they encourage the savings habit.

“However, consumers will need to work out if they are the right choice for them, as some accounts can be restrictive and might not be suitable for larger deposits.”