santander123 - is it worth it for me?

Newly_retired

Sorry if this has been answered already but I haven't found it yet.

I already have a Santander current account, zero fees, with several DDs but all the benefits have now run out for me.

Santander have suggested I transfer to the 123 account and I have enough income going in to qualify.
I know the fees are £2 per month = £24 pa.

Leaving aside cashback for now, how much in Savings at 3% do I need to keep in there to make it worth my while?
I know it has to be over £3k and below £20K.
Sorry but maths is not my strong point.
Thanks for your help.

KTF

Use the calculator on their site to work out how much cashback you would get from the various DD, etc.

Newly_retired

Thanks but the DDs I have are not ones that qualify.
Our utilities are from a different joint account and I don't plan to change those over.

I just need someone to do the maths for me re savings.
I have to say it has to be really worth my while to want to take the risk of having a large amount of savings in my main current account.

YorkshireBoy

Newly_retired wrote: »

how much in Savings at 3% do I need to keep in there to make it worth my while?

By "worth my while", I assume* you mean to break even, ie cover the £24 fees?

That will depend on how much your savings are earning at the moment, and how much you have.


* I assumed incorrectly. The goalposts have been moved by your post whilst I was typing!

YorkshireBoy

Newly_retired wrote: »

I have to say it has to be really worth my while

Your OP said, simply, "worth my while". Now you're saying "really worth my while". "Worth my while" is subjective.

to want to take the risk of having a large amount of savings in my main current account.

What's the risk (you perceive)?

Geoff_W

Newly_retired wrote: »

Sorry if this has been answered already but I haven't found it yet.

I already have a Santander current account, zero fees, with several DDs but all the benefits have now run out for me.

Santander have suggested I transfer to the 123 account and I have enough income going in to qualify.
I know the fees are £2 per month = £24 pa.

Leaving aside cashback for now, how much in Savings at 3% do I need to keep in there to make it worth my while?
I know it has to be over £3k and below £20K.
Sorry but maths is not my strong point.
Thanks for your help.

Ignoring cashback, to cover the £24 annual charge:-

Keep in £800 if you are a non-Taxpayer (£800 @ 3% = £24)
Keep in £1,000 if you are a Basic Rate Taxpayer (£1,000 @ 3% - 20% Tax = £24)
Keep in approx £1,350 if you are a Higher Rate Taxpayer (£1,350 @ 3% - 40% Tax = £24.30)

YorkshireBoy

Geoff_W wrote: »

Ignoring cashback, to cover the £24 annual charge:-

Keep in £800 if you are a non-Taxpayer (£800 @ 3% = £24)
Keep in £1,000 if you are a Basic Rate Taxpayer (£1,000 @ 3% - 20% Tax = £24)
Keep in approx £1,350 if you are a Higher Rate Taxpayer (£1,350 @ 3% - 40% Tax = £24.30)

...and also ignoring the interest the savings are currently earning elsewhere, which would be 'given up'.

Geoff_W

YorkshireBoy wrote: »

...and also ignoring the interest the savings are currently earning elsewhere, which would be 'given up'.

Very true, but the calculation gets a lot more complex when you have to factor in 'loss of interest'.

Newly_retired

Many thanks for those calculations Geoff W. Just what I needed.
I can now see how to cover the £24.

I just have to decide whether I want to merge savings with a well used main current account and whether the security risk is real or negligeable.
Thanks for all replies.

YorkshireBoy

Geoff_W wrote: »

Very true, but the calculation gets a lot more complex when you have to factor in 'loss of interest'.

But essential so as to ensure the OP's objective of "really worth my while" is met?

For example, lets say their savings are in a Halifax Online Saver (just because I have one!) paying 2.8% AER.

The rate on the 123 account works out at around 2.9% after the fee is deducted. Would the extra 0.1% (0.08% after BR tax) make it "really worthwhile" opening the account?...especially when they could make a 'clean' 3% with LTSB Vantage accounts (3 max, covering £15K)?

ManAtHome

Note that you need at least £3k to get 3% interest (1% on £1k+, 2% on £2k+, 3% on £3k+).

Another thing to consider - if you spend time in Spain near a Santander ATM, you can get Euros at the Visa rate with no extra charges.