Santander 123 Account

eskbanker

Hominu wrote: »

Depends if they are fishing for any more customers I guess.

They'd have another product name for that: the "1-2-3-4-5, once I caught a fish alive"

I'll get my coat....

MrsFabulous

I'm thinking of switching to Santander 123 from Smile. I can fulfill the requirements regarding the minimum deposit every month, and direct debits etc. I have some ISAs and am wondering whether to take some money out - e.g. 18 to 20,000 and keep it as 'savings' in the Santander 123 account, which would get me 3% interest. Is it worth doing this, as I'd then be taxed on the interest earned? (ISAs are tax free.) I just can't do the sums! Thanks for any thoughts or advice.

talexuser

Providing you are over the threshold and have the DDs, then 3% gross is 3 x 0.8 = 2.4% net for basic rate taxpayer - minus the monthly charge which reduces your effective interest rate, plus any cash backs on the DDs which offset the monthly charge to increase your rate.

So if your ISAs are significantly less than 2.4% since tax free is the gross then the 123 account may be the better bet.

If the difference is only marginal, or even not so much, you may prefer to keep the money in the tax free wrapper for long term compounding. Once it's taken out of the ISA you can only replace it by using up the current year's allowance.

MrsFabulous

Thanks for this, Talexuser. The ISAs do return significantly less than 2.4% despite having moved them recently, so I'll probably go for the Santander 123 option. Thanks again!

Gromitt

Well, 20K @ 3% = £600
Minus BRT = £480
Minus account fee = £456

Net Interest: 2.28%
Assuming no qualifying DDs.

innovate

Gromitt wrote: »

Well, 20K @ 3% = £600
Minus BRT = £480
Minus account fee = £456

Net Interest: 2.28%
Assuming no qualifying DDs.

Qualifying DDs can make a big difference though. Assuming you are a BRT payer and have at least £20K in your account every night:

Cashback of £2/mth would eliminate the account fee. Equates to 2.4% return
At £5/mth, cashback would knock 50% off the tax you pay - £540 return, = 2.7% return
If your casback is £10/mth, the return is 3%.

If you have less than £20K in the account each night, cashback could generate even higher percentage return. E.g. cashback of £10/mth and £10K in the account each night would generate a 3.6% return (£300 interest minus £60 BRT plus £120 cashback = £360, or 3.6%).

Of course, the AER remains 3% regardless.

grizzly1911

Just putting council tax and energy through one of my accounts brings it to around £4 cash back per month.

MrsFabulous

I'm grateful for these helpful replies, thank you all. I think the qualifying DDs will make a difference, so I applied today and they've already opened my account! Thanks again.

steen

Hi there,

I am a non working (in cash terms) stay at home mum and am trying to open a Santander 123 account in my name. As a couple (dh is a higher rate tax payer (no child benefit)) we have a Halifax joint current account which is and will remain our main account.
The application asks for my cash income (£0) and outgoings (which much include mortgage/rent etc).... but as outgoings exceed income the form won't let me proceed. I don't want to make up an income as the application warns it may need documentation to support the figures.
I'm planning on transferring in £500 a month and meeting the dd criteria but the account will primarily be used as a savings account.
Has anyone else opened the account with, on paper, no income?
Not sure how to proceed so any help would be appreciated.
Thanks

ColdIron

steen wrote: »

Not sure how to proceed so any help would be appreciated.
Thanks

You could open it on the telephone and explain your situation to a person
[FONT=&quot]0800 389 9875 [/FONT]