Is the Santander 123 Account Worth it?

anotheruser

Is the Santander 123 Account worth it?

I currently have a current account, savings account and joint account all with the same bank but I am figuring I might be better off closing the joint account, which I use for bills and opening the 123 account.
I guess the cashback and interest is paid at the end of a 12 month period?


It's difficult because I have been looking at the HSBC Premier account, which would qualify me for a 6% rate on their Regular Saver account (although that is only up to £3000). Judging by the amount I have in actual savings, the £24 per year is worth paying but it will mean splitting up my savings account. The account benefits don't matter that much as I probably would only use the travel insurance.

I don't really want to have more bank accounts than I need to, but can't seem to find a good bank that will give me a good rate for savings unless I pay them for a current account

EDIT: See my response after 9 months of having the 123 account in post 150

innovate

If you apply for a 123, do it via Quidco or TCB - - should yield around £50 in cashback from them if you do it right.

The Santander cashback gets paid monthly, as will any interest, on your account opening anniversary.

Lovely account, makes me at least £11 a month in cashback, plus lots of interest since I can always keep my balance above £3K.

You can search the Forum for more reports from others on the 123.

macman

As pointed out above , unless you can keep a balance of £3K minimum, then the interest rate at 2% is nothing wonderful. 3% above £3K is more like it.
You also have to fund it by £500 minimum per month.
The cashbacks on the minimum 2 DD's should easily cover the £2pm service charge.

RP2X

Can you open up more then one Santander 123 account, lets say 3 of them and still get the 3% interest on them each ?

innovate

Yes but they all come with the same T&Cs, and the real interest rate (before tax) is probably closer to 2.88% after charges.

EKEA

If you had a bunch of them, then you could circulate a fund of £500 between them. I wonder if that would count as a Direct Debit?

JimmyTheWig

If you've got a Santander mortgage then the 123 account is a no-brainer.
If not, it should be worth it for most people if they can be bothered to switch.

RP2X

Thanks innovate

yes I see 2 DD requirement also, did you mean interest rate after tax ?

Am seeing many deals around saying 3% or 2% but then seeing the net and its a little less....... good thing to read the actual small print !

RP2X

EKEA wrote: »

If you had a bunch of them, then you could circulate a fund of £500 between them. I wonder if that would count as a Direct Debit?

lol am thinking the same thing, I reduced most of my dd to just 3...
almost feels worser if you got say Virgin covering your BB and TV and mobile, counted as 1 when you would love 3 for santander 123 deal:D

lurch42

I'm tempted by this, but am wondering about the added risk of theft. Imagine someone got your card details (or your card) - keeping all (or a good chunk) of your savings in the directly-linked account gives thieves access to more of your money more easily. Not something Santander seem to mention...

Gromitt

RP2X wrote: »

yes I see 2 DD requirement also, did you mean interest rate after tax ?

Interest rate after tax is 2.4%
But if you don't have qualifying DDs, then you'll have to take £24 out of your interest, so you'll get an effective interest rate of 2.3%, assuming the full 20K is deposited, otherwise less.

lurch42 wrote: »

I'm tempted by this, but am wondering about the added risk of theft. Imagine someone got your card details (or your card) - keeping all (or a good chunk) of your savings in the directly-linked account gives thieves access to more of your money more easily. Not something Santander seem to mention...

If someone got into your bank account they could transfer the entire contents of your savings account to your current account and withdraw it anyway, and has been done. Only difference is if they stumble over your VISA debit card number and go on a spending spree, but thats still fraud and will be refunded.