I intend switching banks. Santander offers 1.5% interest on balances up to £20,000 but charges a £5 monthly fee. HSBC pays £150 for switching and also has a 1 year Regular Saver account paying 5% interest on £250 paid in monthly. If I have £16,000 in my account, would Santander or HSBC gain the most money over 1 year?
The 1 year Regular Saver account is not equivalent to 5% saving account. You can only deposit 250/month and you are forced to withdraw all of them at the end of 1 year period. If you look into their sample calculation, if you deposit 250 every month, at the end you get 3081.25 (less than 3000*1.05). In the next year (if they still have the same offer), you will have to restart the deposit.
Mathematically you can think of that as a combination of a 12 month CD, 11 month CD, ... 2 month CD, 1 month CD over a year (start at the time you open the account). Each of them is limited to 250 dollar deposit and pays 5% APY. It should be treated as a promotion bonus but not a regular saving strategy.