Santander 123 and ISA

Mr0

Sorry for making another topic on this, I know there are loads of them.

So I crossed the dark side and opened one of these accounts and have 2 direct debits set up. But these are paid quarterly (phone) and every 6 months (water), do they still qualify? Also they are for different addresses, both my homes (ish).

Also I am not sure why but they set me up for having my interest paid gross when I opened my account last month. I am self employed so have to prepare a tax return anyway so I would actually prefer it this way and pay any tax I owe at the end of the year, to keep it nice and neat. Would I get into trouble for doing it this way?

I have ~£11500 in a Santander ISA and the rate will drop from 3% to 1.5% in 9 days. So I am thinking it would probably be better to just put it all in my current account. I have £7500 in my 123 account atm so altogether quite close to the £20000 interest limit.

All the money is earmarked for repaying a mortgage in 12 months time so the tax status does not really matter to me. I cannot repay the mortgage right now as I stupidly fixed it for 2 years, I didn't expect to be able to save this much at the time. I am saving about £2500 p/m atm and I don't know where to put it anymore. I have checked out other similar accounts but they don't look as attractive. Any ideas of where to park the money?

Maelwys

Mr0 wrote: »

So I crossed the dark side and opened one of these accounts and have 2 direct debits set up. But these are paid quarterly (phone) and every 6 months (water), do they still qualify? Also they are for different addresses, both my homes (ish).

As long as they're in your name I suspect it'd not matter about different addresses.

From the Santander site, the Full Terms-and-Conditions just mentions that you "must have two two direct debits set up on the account", not that they have to be paid monthly. However on the FAQ, it specifically says that the CASHBACK benefits require that these Direct Debits be made monthly; so I'd be a little unsure what they're exactly asking for regarding the INTEREST benefit.

Realistically speaking you'd probably be better to just sidestep the issue and setup two monthly £1 DDs to a charity etc. to cover your back - see forums.moneysavingexpert.com/showthread.php?t=4168667

There are older threads about the gross interest issue - basically the answer seems to be that you can specially get Santander to set it up that way, but you might need to escalate your query in order to talk to a manager that actually understands what you're talking about before they'll do it.

Gromitt

I recently spoke to Santander and they've said differently. You only need 2 DDs setup to get interest, they don't care to who or if they are ever 'paid', as long as they appear as active DDs on your account.

For cash back you'll get it whenever the relevant DD is paid, which could be monthly, quarterly or yearly.

Archi_Bald

Mr0 wrote: »

Any ideas of where to park the money?

In a second 123? Almost a no-brainer. But could investigate Lloyds/BoS Vantage, and may be TSB if they will offer similar.

Mr0

Didn't know that you can get another 123 account.

Just found the other post and saw how people got 4+. If I knew sooner I would have opened more, shame its limited to just two now..

Guess I'll just do that then, £40,000 should be enough for now :j

Ummm another question.

I used topcashback when opening the first account. I didn't use the switching service but rang the companies directly for to set up the direct debits. They are now showing online. Topcashback has confirmed the cashback but has not paid it out yet.

Would I be able to do it again when opening another account online? Or would they somehow see that I am not a new customer and not pay out. I guess I can also try quidco instead?

Also it now says that you have to use the switching service. I have another current account that I use for pocket spending that has no direct debits or income coming in (I only top up when I am low). Would this work for switching? Though there is actually nothing to switch.


Thanks again.

xylophone

Also I am not sure why but they set me up for having my interest paid gross when I opened my account last month.

If you are a tax payer, the account should be paying your interest net of tax.

Mr0

I didn't ask for it but they sent me a letter for saying that I am registered for gross interest. I changed it online now.

Archi_Bald

Mr0 wrote: »

Also it now says that you have to use the switching service. I have another current account that I use for pocket spending that has no direct debits or income coming in (I only top up when I am low). Would this work for switching? Though there is actually nothing to switch.

You have nothing to lose by trying? I would go the Quidco route if you have already used TCB.

dano24

If you have the 123 account, all you need is 2 active direct debits on their system, obviously you will only get cashback when they are paid, but the DD criteria is met if they are set up on the system.

Think long term with your ISA, the rates might be low at the moment, but you take it out of your ISA it loses its tax free status and if you want to put in to an ISA in the future you will be shackled by that Tax Years contribution limit. Have you looked at their 2.1% 2 year fix 123 exclusive? I would say, do whats right for you, but don't frett over 1.5% interest in the short term...

gezza2k

Keep £20,000 in Santander 123 as 3% is probably best rate atm.

Get a few Nationwide flexdirect accounts, upto £2500 @ 5% for 1 year.
I don't know how many you are allowed.

Another option is Lloyds vantage @3% upto £5000, iv got 2 or just make life simple and get another 123 account.

I have managed to save over £23,000 somehow (don't know how tbh it just keeps going up) and I have it stashed all over the place but that's what you have todo to make it pay for itself.

Mr0

Just got my first monthly interest payment from my 123 account so I guess quarterly dd's do work.

Dano, are you sure you didn't call me on thursday selling the same product? . I had a call from Santander because they saw that my ISA rate is changing and wanted me to switch. I only need to keep this money somewhere for upto 18 months, when I would then repay a mortgage with. So the tax status doesnt matter too much, I do know what you mean with contributions though.

I have applied for another 123 account now, just waiting for it to go through. I looked at the other accounts but the interest limit is too low for me.