Is the Santander 123 Account Worth it?

JimmyTheWig

macman wrote: »

If you reduce the 3% S123 interest rate by factoring in the £2 monthly fee, then surely you also have to factor in the effective gain you get from the cashbacks? I have set up the minimum 2 DD's on mine, and get approx £3 per month, which more than covers the monthly fee.

I think this bit of the discussion started when people were talking about opening a second 123 account. They wouldn't gain anything from the DDs as they could get cashback from them regardless of what account they were in.

macman

Hominu wrote: »

The £24 comes out the net rate though, not the gross rate, so you can't factor it in like that, but for the purpose, it's close enough. 2.84% is much closer than 2.88%.

In that case your not using it as a pure savings account, but a current account, so would indeed need to feed those into the equation as well.

But since you have to set up 2 DD's on the account anyway, it would be perverse not to use 2 that pay you cashback anyway. And preferably at the 2 or 3% rate. In my case, that is the limit of my use of it as a current account.

plunt

not sure if its mentioned anywhere here but what happens with over payments on direct debits? I recently came accross this "idea" as I had been paying way to much in my monthly installements (due to switching provider and them having a terrible estimate of my monthly usage) anyways they issued a refund by cheque.

So it let me to thinking about overpayments. Some providers such as spark energy let you set up what ever amount you want for the direct debit amount. So say i put in £500 per a month (just an example!). Then ever 3-6 months they revalue your payments to see if you are paying to much or to little. so they issue a refund.

3 months X £500 = £1500
Cashback 2% on £1500 = £30

just an example but would this work? what t&c's stop this? and can anyone find any forum posts with people who have tried this?

Mayday

My elderly father has a Santander current a/c and is thinking of changing to the 1-2-3 a/c, but has a query regarding interest rates.

If the bank rate goes up, does the interest offered on 1-2-3 accounts also go up ?

innovate

May be, may be not. The 123 rate is variable, so it could go up or down anytime they like. Since it is an instant access account, your dad can get his money out any time he likes if he finds anything better.

JimmyTheWig

I would imagine, given the name, that they are unlikely to start paying out, say, 1.25% interest.

But as innovate says, if the account becomes particularly uncompetitive you can switch away from it.

eskbanker

innovate wrote: »

The 123 rate is variable, so it could go up or down anytime they like

While this is undeniably true, the way the account name is intrinsically linked to the tiered interest (and cashback provision) rates makes it less likely than most to change IMHO, which has been a good thing in recent times but would obviously be less so when (if!) rates start to increase again....

Mayday

Thank you for your thoughts- now to see what my father decides to do

anotheruser

As the OP, I can definitely say the answer is a YES.

According to their calculations, I've amassed well over £130 since April. I easily expect this to get over £150 by the end of the year so I don't mind paying the £24 fee. I'm also currently paying no mortgage so with this included it would be even more.

Their online banking is pretty easy to understand, although could be simpler. No app for Windows Phone but the mobile banking is enough for now.

In branch they have been very helpful most of the time. In fact the one time they were not, the lady felt really bad and said she could give me a ring after investigating further. I do wish they would style their banks like Lloyds though and get rid of this glass shield thing. Compared with Lloyds, other banks look awful But that is a moot point really.

I find their 123 Credit Card good too, even down to the executive black style, but wish it came with free payments abroad like the Halifax Clarity for example.

For MSE'ers:
In case you didn't think of it and you REALLY want to save the £24 on the CC fee (as it's free for the first year), then cancel it after the year. Get your partner to grab one as the lead user, which should be free. Hassle but saves £24. I personally won't be doing this.

plunt wrote: »

not sure if its mentioned anywhere here but what happens with over payments on direct debits?

In my experience, nothing... yet.
I paid council tax in one go until 2014, via DD then got all the cashback instead of monthly, 10-monthly or 12-monthly. Later this year I received a refund from them but I guess as it already went out as a DD then it doesn't matter.

I guess if you have the cashflow, there's nothing stopping you pay £200 a month in gas/electric. Then at the end of the year get it back in a cheque. However you would have to calculate if it was worth it or should you keep the cash in your bank to get more in the overall interest rate.

vintageb3

Really stupid question here:

I just applied for a Santander 123 account. When it comes to funding the account monthly, can I simply set up a standing order from an account in another bank to fund the 123 account with £500?….then when its reached the account...transfer it back?…or indeed transfer back £600?

I'm only using these figures to get my head around funding the account.

Thanks in advance

vintageb3