Santander 1-2-3 account 3%

miketaff1408

I am considering opening a Santander 1-2-3 current account and holding £20,000 in there as a savings account. Obviously I would need to transfer in £500 per month, but that can be moved out again as I realise that there is no interest on balances over £20,000.

It is late, and my brain is fried. I am appealing to all the clever maths boffins out there to possibly work out what the actual Apr is when you factor in the £2 a month account charge?

Thanks,

Mike.

switch76

2.88%. If you are basic rate tax payer you will get 2.28%.

miketaff1408

switch76 wrote: »

2.88%. If you are basic rate tax payer you will get 2.28%.

Thanks. So for a fully instant access account, that is not bad. I know you can get better if you tie your money up, but I may need to pull my money at short notice if the right house comes along at the right price.

notbritishgas

Don't forget the requirement to set up 2 Direct Debits.
You certainly need that to get the cashback but I think it may be a requirement to open the account.

miketaff1408

notbritishgas wrote: »

Don't forget the requirement to set up 2 Direct Debits.
You certainly need that to get the cashback but I think it may be a requirement to open the account.

Thanks. May move the DD's that pay the most cashback.

I am currently only paying £115 per month interest only on my mortgage. I am saving elsewhere to pay off the mortgage as it's APR is only 1.25% at the moment and I can beat that with savings.

Instead of paying overpayments to the account by standing order, do you think it would be possible to increase the direct debit to around £600 per month so I can pick up the 1% cashback? The mortgage is with Woolwich (Barclays). Can you make overpayments by increasing the DD or can you only make overpayments by BACS or standing order? (which I presume wouldn't attract the 1-2-3 cashback.)

drjones

I don't think you get cashback on mortgage DDs unless you have a Santander mortgage.

miketaff1408

drjones wrote: »

I don't think you get cashback on mortgage DDs unless you have a Santander mortgage.

Thanks. Didn't look close enough and now can clearly see it is only Santander and A&L mortgages.

drjones

For reference, I have a Santander mortgage at about 3.4% and the 1% cash back on my £430 monthly payment effectively lowers the rate of my mortgage by 0.1%. It's a nice bonus, but in the long run a minor consideration compared to mortgage rate.

ses6jwg

Just set up your Sky and your Council Tax bill. Will probably cover the £2pcm.