Santander 123 and HSBC?

Elena0792

Hi everyone!

I am going to be a mature student starting uni this September. I will have £2,000-£3000 to lock away in savings to which I will add £500 every month after. So I was thinking about opening a Santander 123 account...and maybe using that to pay my bills too?

But then for day to day use I might stick with my original bank (HSBC) and switch to a student account. But this only gives instant £500 in overdraft, with up to £3000 depending on credit etc. Should I switch to an account with a higher guaranteed overdraft so I can stooze that money in my 123? Or should I stick with HSBC.

Is it okay to have two bank accounts like this and is this the best option for my savings when other interest rates are so low? What if they improve in 2014, is it easy to switch?

Thank you in advance!!

grumbler

It is OK to have two and more accounts.
However, I think you can get a better rate on £2.5K with FlexDirect account at Nationwide.

And even 4% Regular Savings account that you can have with HSBC beats Santander for £250 p.m. savings.

Regarding the overdraft and 'stoozing', IMO it's hardly worth the hassle for £30ish p.a. per £1K stoozed.

Regarding switching your savings, I don't see any problems unless it's some fixed rate account.

Elena0792

Thanks Grumbler! You're right Nationwide is way better.

So if I put 2,500 in the Nationwide account I can get 5% AER for the first 12 months. After that it reverts to 1% so could I take my money out and switch?

grumbler wrote: »

It is OK to have two and more accounts.
However, I think you can get a better rate on £2.5K with FlexDirect account at Nationwide.

And even 4% Regular Savings account that you can have with HSBC beats Santander for £250 p.m. savings.

Regarding the overdraft and 'stoozing', IMO it's hardly worth the hassle for £30ish p.a. per £1K stoozed.

Regarding switching your savings, I don't see any problems unless it's some fixed rate account.

Gromitt

Elena0792 wrote: »

So if I put 2,500 in the Nationwide account I can get 5% AER for the first 12 months. After that it reverts to 1% so could I take my money out and switch?

Correct, just remember to put in £1K per month, otherwise you get nothing. You can transfer it back out within the same minute as you transfer it in - it just needs to bounce through the account.

Elena0792

Gromitt wrote: »

Correct, just remember to put in £1K per month, otherwise you get nothing. You can transfer it back out within the same minute as you transfer it in - it just needs to bounce through the account.

Seriously? I did not realise that! I think that's what put me off in the first place, the 1,000 per month, because I will only have 500 per month. But if it only needs to bounce through...

innovate

Elena0792 wrote: »

Seriously?

Yes.............................................................

Hominu

Elena0792 wrote: »

I will only have 500 per month.

But you'll have 2.5K in the account, so just transfer 1K out and then back in again one day during the month and you'll be fine. It should take less than 2 minutes a month.

innovate

Hominu wrote: »

But you'll have 2.5K in the account, so just transfer 1K out and then back in again one day during the month and you'll be fine. It should take less than 2 minutes a month.

Worth remembering that the 123 "month" starts on the day you opened your account, i.e. most likely it isn't a calendar month.