Santander 123, savings a/c only

Bromley86

I'm in a happy place with First Direct and so don't want to transfer my day-to-day banking and direct debits. I would like to get my hands on the 123's 3% rate on £3k-£20k though, as well as possibly their cash ISA.

I've had a read about it here, so I know it's just a matter of leaving my 20k in the account, transferring £500 in and transferring it back out again (along with any balance above £20k).

The thing I'm having trouble getting my head around is the 2 direct debit part. I currently have an old Santander Everyday Current A/c and I can't see an option to set up a direct debit. I've got these options:

• Pay a new bill
• Pay a new person
• Set up a standing order

Would setting up 2 standing orders to my FD a/c count as 2 direct debits?

Also, I've seen people post that they've opened up multiple 123 a/cs. Is it a simple matter of just tying to open a new a/c online and seeing if it's accepted?

mulronie

Direct Debits need to be set up by the company claiming - they are totally different to standing orders, which are set up by you. So, no - 2 standing orders would not count as 2 direct debits.

You would need to go to one or more of the companies who direct debit your First Direct account and tell them the new Santander account details - simply as that! Alternatively Santander would actually do it for you through the "account switching" process, although some people find it easier to phone the companies themselves.

To really get the 123 Account working for you, you should move some/all of the following, as you will get cashback!

• 1% cashback on water and council tax bills
• 2% cashback on gas and electricity bills
• 3% cashback on mobile phone, home phone, broadband and paid-for TV packages.

Most households could easily cover the £2/month fee just by having council tax and water direct debits set up the 123 Account, let alone anything else.

And don't forget to go through Topcashback when you open the account - another £55.55 cashback is waiting for you!

VT82

Is there any guarantee on how long the 3% rate will last, does anyone know?

I'm tempted by the account. Most of my bills come out of a joint account, but my £38 mobile bill could get switched to Santander, and I could set up another DD from my Tesco savings (the fourth - after one in each of three Lloyds Vantage accounts!).

Only problem is, I've not actually got that much savings that isn't either sheltered in an ISA, earmarked for being sheltered in an ISA, in a higher paying regular saver ('til May), in a higher paying Vantage account ('til October) or in Santander's own 3.2% E-Saver Issue 5 ('til June).

Do you think I should open it now to bag it while its open, and maybe not even get my £2 pm cost back as cashback/interest? Could I get Quidco rather than TCB? Will I get the 3% rate for longer if I wait longer before opening it?

Thanks!

innovate

VT82 wrote: »

Is there any guarantee on how long the 3% rate will last, does anyone know?

. Your guess is as good as anybody else's - it's a variable rate so could change anytime. There have been some posts here claiming it would be "for life" - - I would ignore such claims because they are not substantiated by T&Cs.

I

VT82 wrote: »

Do you think I should open it now to bag it while its open, and maybe not even get my £2 pm cost back as cashback/interest? Could I get Quidco rather than TCB? Will I get the 3% rate for longer if I wait longer before opening it?

Thanks!

Don't think there's much point in opening the account if you don't get any value from it. You could got via Quidco - - though with any Quidco/TCB cashback, don't bank on it until you have actually received it. There is nothing in the T&Cs that guarantees the 3% for any period of time, and there is nothing in the T&Cs that limits the time you can get interest in.

innovate

For easy DDs, check post 1 in https://forums.moneysavingexpert.com/discussion/4168667

Note, the Santander esaver one would probably not much use for the 123 since I think they want to see the money to go outside Santander. Though it doesn't say so in the T&Cs - don't think they considered people not wanting to make use the cashback-earning DDs. Those yield a net £9 for me each month so I gladly moved all my relevant DDs to Santander.

Bromley86

Thanks Innovate, great list. If I set up a Tesco savings account, do you think Santander will accept 2 direct debits from that single account? Per the T&C, it looks like that'd be okay, but I may have missed something:

you must . . . have at least two Direct Debits set up on your account

Newly_retired

You could always donate to a charity by DD eg £ 2 per month.
For example, Red Cross is easy to get set up from their website.

innovate

As long as it's easy to open savings accounts that let you do DDs, I wouldn't try 2 DDs against the same account (or do charity DDs). There isn't anything in the Santander T&Cs that says the DDs must be different, but they can very easily find out whether it's one or two companies that get the DD.

logie48

Can I ask a question to those more informed about this account.

It's ISA time for me, but as I was browsing I noticed all the hype regarding this current account. I'm currently with HBOS on a fee with benefits account. I am assuming any tax deductions are included with my £10 monthly fee?

Anyway. I'm looking at the Santander 123 account. Does this mean for balances over £3k, i'll earn 3% AER (if I cover the terms, i.e. DD's)? and any cashback rewards?....

BUT minus £2 a month fee, and tax. Can anyone explain tax on these accounts?? I've not been used to tax being deducted on my account as it's fee based, and any other deductions I may also have missed.

Many thanks in advance.

Bromley86

Yep. £1-2k = 1%, £2-3k = 2%, £3k+ = 3%. Requires £500/month going in (it can go out again), £2/month fee and 2 or more direct debits per month.

Cashback on qualifying direct debits likewise requires the £500/month, the £2/month and the 2 DD/month.

Surely you were paying tax on your old HBOS a/c regardless of the fee? Same deal here, 20% taxed at source (unless you earn, from all sources, less than £8,105 per year and have completed an R85 form for gross interest).

logie48

Bromley86 wrote: »

Yep. £1-2k = 1%, £2-3k = 2%, £3k+ = 3%. Requires £500/month going in (it can go out again), £2/month fee and 2 or more direct debits per month.

Cashback on qualifying direct debits likewise requires the £500/month, the £2/month and the 2 DD/month.

Surely you were paying tax on your old HBOS a/c regardless of the fee? Same deal here, 20% taxed at source (unless you earn, from all sources, less than £8,105 per year and have completed an R85 form for gross interest).

I have never had any tax deductions on my HBOS account. Well none are mentioned on my statement. Only deductions are my monthly fee. It is my main account and my salary goes in it each month. It's a BOS Ultimate Reward Current Account which is not available anymore.

I take it, if i'm sitting with over £3k in the santander 123 account, then I would be deducted 20% tax each month, which would effectively be 17% (20% - 3% interest gained)?