Advice on Santander 123 account please

xxdeebeexx

Hi, could someone clarify some points for me please.

Mum, 86yrs old, has £32,000 in her Santander current account. I don't think she is getting any interest on this money.

She is getting £500+ pm in pensions being paid into her account.

She has a quarterly dd/so (don't know which) to BT on the account.

I have just seen the Santander 123 account and was wondering if this account could work in her favour.


She needs 1 more d/debit, Can she send money to herself?

Is the interest paid monthly?

Is the £2 fee paid monthly?

Do you Have to take out a credit card ?

Can you get a cheque book and a cash card?

Mum prefers paying the bills by cheque... She is very set in her ways and is worried about change.

I thought this account would give her some interest on her money and the account number will remain the same

tia

dx

td_007

xxdeebeexx wrote: »

I have just seen the Santander 123 account and was wondering if this account could work in her favour.
She needs 1 more d/debit, Can she send money to herself?

Yes

xxdeebeexx wrote: »

Is the interest paid monthly?

Yes

xxdeebeexx wrote: »

Is the £2 fee paid monthly?

Yes

xxdeebeexx wrote: »

Do you Have to take out a credit card ?

No - but CC fee is waived for the first year (at least)

xxdeebeexx wrote: »

Can you get a cheque book and a cash card?

Yes

xxdeebeexx wrote: »

Mum prefers paying the bills by cheque... She is very set in her ways and is worried about change.

I thought this account would give her some interest on her money and the account number will remain the same

tia

dx

The online saver gives a better rate of interest compared to the 123 account which gives 3% on amounts between £3K - 20K.

Consider Lloyds TSB which gives 3% interest £5K balance and leave the rest of the money in the esaver account.

xxdeebeexx

td_007 wrote: »

The online saver gives a better rate of interest compared to the 123 account which gives 3% on amounts between £3K - 20K.

Consider Lloyds TSB which gives 3% interest £5K balance and leave the rest of the money in the esaver account.

Thank you so much for your time.

I realise that the online saver is better, but a small drop in % rate allows mum to continue without having to 'change'

I have tried to encourage her to look at the TSB /Halifax 'round robin' but it's too much for her to understand.

When the money from Dad's estate comes through I might encourage her , again, to have a look at the Esaver as she could treat this as a 'bond' and have the interest paid into the 123 account. She will be able to access the Esaver by phone.

Do you have a 123 account? Are you pleased with it?

thanks

dx

innovate

Please remember that only £85K in a single financial institution is FSCS protected - - if your mum already has £32K, and is expecting money from an estate, this may well be relevant. Hopefully your mum will understand that she will be better off having a Halifax / Lloyds / good savings account etc alongside her Santander one.

I have had a 123 since they first became available - very happy with it since the cashback and the interest more than pay for the monthly fee, and the money has been paid promptly as expected for the last 4 months.

You do need to keep an eye on the interest rate though - it's variable, so changing might be needed at some stage in the future. That's definitely also the case for the esaver - though so far, it has always been possible/sensible to move to the next issue of the esaver. You must move to it yourself, Santander won't do it for you.

Good luck with you mum! I know it is a delicate subject, but given her age, perhaps she should think of giving you, or another person of her choice, power of attorney, just in case she might not be able to handle her affairs herself.

BTW, is she a taxpayer? If yes, a cash ISA would be a good idea. If no, get her to fill in an R85 form so she gets the interest gross.

Sailmakers

Don't need r85 at Santander...

innovate

Sailmakers wrote: »

Don't need r85 at Santander...

Care to elaborate?

BobQ

Sailmakers wrote: »

Don't need r85 at Santander...

True if you want to pay tax, otherwise I think you are wrong.

Why would HMRC exempt Santander from its general requirements?

xxdeebeexx

Thanks for the advice and help........
Mum wants to simplify her finances.

At the moment she has accounts with Santander, Nationwide and Barclays. She has a number of products in each. As far as I can see Barclays and Nationwide have nothing much to offer except bonds. (Who wants a 5yr bond at 86?)

She has her cash ISA for this year

Can you still have 3 x 3% accounts with TSB ?

She isn't bothered about interest on her savings as she 'has plenty'. TBH it's all a bit of a bother for her....... I would like her to maximise her interest simply because we don't know what's around the corner....... who's to say that she won't live into her 100's ? by that time her lump sum would have all gone along with her financial independence.............

mmmm

dx

BobQ

In general its not a good idea to have £32K in a current account given potential for fraudulent use of a debit card.

I have a Santander 123 account and it works fine. Santander get a lot of flack and probably deserve some of it but in general I think they are fairly good. Just a pain if you cross the threshold of the branch as they start high pressure selling.

A Power of Attorney works surprisingly well with Santander. I can manage my own accounts and those of someone else under a POA all through the same login.

I should try and convince your Mum to use more DDs, there may come a time when she may be less content to use cheques. You can still get a printed statement with a 123 account and use telephone banking.

xxdeebeexx

BobQ wrote: »

In general its not a good idea to have £32K in a current account given potential for fraudulent use of a debit card.

Gosh, I hadn't thought of that!
Back to the drawing board

dx

innovate

xxdeebeexx wrote: »

Mum wants to simplify her finances.

Unfortunately, if there is plenty of money, it can get a bit involved. Also, interest rates do drop after 12 or so months on many accounts, and you have to move your money or accept abysmal interest rates

xxdeebeexx wrote: »

(Who wants a 5yr bond at 86?)

If there are sufficient funds, it might not be such a bad idea to put some of it into longer term accounts, simply because the interest rate will generally be higher. Could opt for monthly interest payment if required, and if offered.

xxdeebeexx wrote: »

Can you still have 3 x 3% accounts with TSB ?

Worth a try - though probably have to go into the Branch to open the 3rd one (assuming she'd open the first two online, with your help if necessary)

xxdeebeexx wrote: »

She isn't bothered about interest on her savings as she 'has plenty'.

hmh, that's just silly! As you say, she could live for many more years, and in any case, she should take every penny she can get. Though I appreciate, she probably has very firm ideas......