Santander 123 Account DD Question

daveoc22

I'm thinking of getting one of these accounts and I understand that you require two monthly direct debits to operate it (among other things).

The two DD's I have are for rates/water rates but, as is usual for rates bills, these are only taken for 10 months, April to January. So, there would be no DD's in Febraury and March.

I've looked and the terms and conditions and I cannot see any mention of what happens if the account has no DD's for two months---anyone come across this situation?.

grumbler

My understanding is that the requirement is to have two active DDs, not two DD payments every month.

innovate

I have the same understanding as grumbler has.

Though will the cashback for these 2 DDs pay for the monthly charge?

daveoc22

Thanks for replies---hopefully the 2 active dd's will cover the requirements then.

The cashback for the dd's will not completely wipe out the monthly fee but the account is going to be used to get the decent interest rate available up to £20000.

psychic_teabag

On 20k, the £2 monthly fee effectively reduces the rate to 2.85% or so (assuming basic rate tax) if you don't get cashback, so it still beats other savings rates at the moment.

grumbler

psychic_teabag wrote: »

On 20k, the £2 monthly fee effectively reduces the rate to 2.85% or so (assuming basic rate tax)...

How does this depend on the assumption?

Gromitt

grumbler wrote: »

How does this depend on the assumption?

It doesn't. Its £24/year regardless of what tax band you are on, and it's 2.8% GROSS.

I think psychic teabag has got confused!

re08149383

psychic_teabag wrote: »

On 20k, the £2 monthly fee effectively reduces the rate to 2.85% or so (assuming basic rate tax) if you don't get cashback, so it still beats other savings rates at the moment.

I was actually going to ask the question, do you have to have 2 DDs set-up if you only want to use as this account for the interest?

Holding £20,000 per month (and transferring £500 in and out per month), would give £568 gross interest for the year after deducting the £24, working out about 2.84%, which is now better then almost all instant access savings accounts.

For clarification, do you need the 2 DDs to earn the interest?

innovate

re08149383 wrote: »

For clarification, do you need the 2 DDs to earn the interest?

Yes, according to clause A4 of http://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1223428158785&cachecontrol=immediate&ssbinary=true&maxage=3600

horsechestnut

re08149383 wrote: »

I was actually going to ask the question, do you have to have 2 DDs set-up if you only want to use as this account for the interest?

Holding £20,000 per month (and transferring £500 in and out per month), would give £568 gross interest for the year after deducting the £24, working out about 2.84%, which is now better then almost all instant access savings accounts.

For clarification, do you need the 2 DDs to earn the interest?

Yes, you do need to have the Direct Debits and also have £500 per month credited to your account (Either you wage or Pension. Money transferred from another account doesn't count as Income)
There is also a Cash Isa with this account that has a good rate of interest if you want one.

innovate

horsechestnut wrote: »

......and also have £500 per month credited to your account (Either you wage or Pension. Money transferred from another account doesn't count as Income)

The last part of your statement is not supported by the T&Cs I posted a link to a minute ago.

Nor is is supported by my experience - I have had this account since it was launched, I always get my cashback and interest each month, and I have neither a wage/salary or pension going into the account. All that goes in is money from a Standing Order I have set up at another bank.