Santander 123 Account

dzug1

Hominu wrote: »

Its very easy to make in excess of 3% on your money. .

Well no it's not - you need skill, knowledge, understanding and the willingness to evaluate and take risks rather than blindly follow some guru given instructions

None of these qualities are that widespread in the population at large and may not be 'teachable'

Gromitt

dzug1 wrote: »

Well no it's not - you need skill, knowledge, understanding and the willingness to evaluate and take risks rather than blindly follow some guru given instructions

I disagree, simply opening a Nationwide FlexDirect will give you in excess of 3%, and if you have 4 accounts then thats 5% on 10K.

bigadaj

dzug1 wrote: »

Well no it's not - you need skill, knowledge, understanding and the willingness to evaluate and take risks rather than blindly follow some guru given instructions

None of these qualities are that widespread in the population at large and may not be 'teachable'

Alternatively on the balance of probability lumping a sum into a vanguard lifestyle fund is also likely to achieve that, certainly over the longer period, which doesn't need a huge amount of knowledge and is certainly teachable.

HScorpio1985

This is probably a stupid question but can one of your direct debits coming out of your account be a direct debit to another bank account? e.g. just direct debiting one of my other accounts 5pound a month. I live in a house share so I don't have any direct debits coming out apart from my phone and I already have a main current account with Barclays.

Also....what's the catch with this account? 3% interest a month on your balance if it's over 3 grand. I am seriously thinking about using it as my savings account.

Thanks

rb10

HScorpio1985 wrote: »

This is probably a stupid question but can one of your direct debits coming out of your account be a direct debit to another bank account? e.g. just direct debiting one of my other accounts 5pound a month. I live in a house share so I don't have any direct debits coming out apart from my phone and I already have a main current account with Barclays.

Not a stupid question at all.

It's not possible to set up a direct debit to a Barclays account (you could only do a standing order, which is different and doesn't count).

Options are:

1) Set up a small monthly charity donation by direct debit; or
2) Set up one of the selected savings accounts that accept DD deposits. Tesco is reportedly easy to open, and easy to set up a direct debit on.

HScorpio1985 wrote: »

Also....what's the catch with this account? 3% interest a month on your balance if it's over 3 grand. I am seriously thinking about using it as my savings account.

They want people to bank with them. So they give a competitive product. No catch.

Lots of people keep their savings in a 123 account.

Note that you can in fact get paid £47 for switching to this account - just apply through Top Cash Back.

Ifts

HScorpio1985 wrote: »

This is probably a stupid question but can one of your direct debits coming out of your account be a direct debit to another bank account? e.g. just direct debiting one of my other accounts 5pound a month. I live in a house share so I don't have any direct debits coming out apart from my phone and I already have a main current account with Barclays.

Yes you can, my DD's are set up one to Tesco Internet and the other to Tesco Savings account, it works fine.

Also....what's the catch with this account? 3% interest a month on your balance if it's over 3 grand. I am seriously thinking about using it as my savings account.

Yes thats the idea. I did not switch my main bank account, just using this as a savings account.

You can open 2 of these accounts in each name.

Archi_Bald

HScorpio1985 wrote: »

3% interest a month on your balance if it's over 3 grand.

It is 3% AER (Annual Equivalent Rate).

That is not the same as "3% interest a month".

Example: you have £20K in the account each day for a year. If you meet all the pre-reqs, you will receive £600 over the year, minus any tax, minus the £2/mth charge. That is about £456 for a basic rate payer for a year, paid monthly, so roughly (but not exactly) £38 a month max. You won't get a penny interest on balances above £20K.

Which is still way above what you could get in other accounts.

TickersPlaysPop

Thank you very very much Archie Bald, for being so polite and taking the time to explain, it is very much appreciated. I'm here to learn and get advice from experts.

I now feel much better about my money with Santander. I posted inflammatory comments in a misguided attempt to try and get attention, after lots of ignored posts on other forums in the past.

I of course believe you, but I'm very surprised TSB, Lloyds and BofS allow the circular movement of 1000, it seems almost insane! It's very uninviting to the likes of me, who would not consider it based on the banks own marketing, almost like they are trying to put people off! Why do they not have such an aggressive advertising campaign compared to Santander? TV is full of adverts for Santander.

Please help my ignorance here..... Is it not a coincidence that Santander are offering a good deal and pushing to take the UK market? The profits of Santander UK will surely benefit the company in Spain? Also, they want to get too big to fail, so our government is effectively taking on a significant risk for their business?

I have trusted Martin Lewis's site a bit too much, and gutted I missed out on a good 4% deal! I don't need more accounts, not now I have taken a risk with the housing market! But I still have a fair amount collectively in the 123 and ISA with Santander....

Please publicise and tell other people that the FSCS will not get your money back straight away. It can takes months. If you don't make this clear, you could advise/ lead people into a situation where they could lose a house purchase if things do go bad with the banks leading to no access to a lump sum of cash needed for a deposit.

Many thanks again

atypical

This is a random but vaguely related point. Anyone know if the increase in current accounts offering higher rates has anything to do with changes in Basel liquidity coverage ratio rules?

I think it means banks have to hold fewer (lower earning) liquid assets if the account is a current account rather than savings account as the money is though to be less likely to be withdrawn.

rb10

atypical wrote: »

This is a random but vaguely related point. Anyone know if the increase in current accounts offering higher rates has anything to do with changes in Basel liquidity coverage ratio rules?

I think it means banks have to hold fewer (lower earning) liquid assets if the account is a current account rather than savings account as the money is though to be less likely to be withdrawn.

In my opinion: no, not at all.

Current account balances are more likely to drop in a stressed scenario, as they are more easily accessed than savings accounts. So on average the current account liquidity requirements would be higher than those for savings accounts (unless you have read something that indicates otherwise?).

I believe rates are purely driven by market forces.