£20k savings Santander 123?

Archi_Bald

Try a TESCO savings account, they can be fed by Direct Debit.

Though the best DDs are those that attract the monthly cashback.

interestlessly

Beware it is not £60 per month at 3% or even £59.20 using 2.96% AER formula. Having recently opened a/c and leaving £20k for full month,recd. just over £50 gross interest. Having spent some weeks asking Bank to explain, finally they tell me interest is calculated for full year thus £20k @ 2.96% AER = £592 which is then divided by 365 (days per year) = £1.62 per day. That is then multiplied by number of days for that month e.g. £1.62 x 31 = £50.28 per month gross interest. Clearly dropping below max. allowed of £20k for even one day in any month will reduce amount recd. for that period. So do not be fooled by promotional headline of 3% upto £20k and thus surprised by what is actually deposited into account each month.

Hominu

interestlessly wrote: »

Beware it is not £60 per month at 3% or even £59.20 using 2.96% AER formula. Having recently opened a/c and leaving £20k for full month,recd. just over £50 gross interest.

20K * 0.03 = £600, /12 = £50. I don't see what your problem is?

interestlessly wrote: »

Clearly dropping below max. allowed of £20k for even one day in any month will reduce amount recd. for that period.

Obviously, they are not going to pay you interest on money you don't have.

interestlessly wrote: »

So do not be fooled by promotional headline of 3% upto £20k and thus surprised by what is actually deposited into account each month.

Don't understand your confusion?

ColdIron

interestlessly wrote: »

using 2.96% AER

It's 3% AER and 2.96% gross
Santander are not fooling anyone, they pay you precisely what they say they will

talexuser

Re the effective interest rate - I keep 20k in, transfer interest out on the day, and replace DD amounts as as they are paid in two 123 accounts. The loss is minimal if you actually are bothered to work it out on a few tens of pounds for one day or two compared to the 20K average over the year. Compared to the rate you are getting elsewhere it's totally insignificant.

Freepost

interestlessly wrote: »

Beware it is not £60 per month at 3% or even £59.20 using 2.96% AER formula.

I'm a bit lost, where did the £60 (£59.20) per month come from?

interestlessly wrote: »

Having spent some weeks asking Bank to explain, finally they tell me interest is calculated for full year thus £20k @ 2.96% AER = £592 which is then divided by 365 (days per year) = £1.62 per day. That is then multiplied by number of days for that month e.g. £1.62 x 31 = £50.28 per month gross interest.

It has been a long long time but I think 20000 x (1.03^(1/365) - 1) will give you the daily interest

blinko

has anyone thought about setting up a charity donantion for £1 per month by DD

liamcov

blinko wrote: »

has anyone thought about setting up a charity donantion for £1 per month by DD

I have done this on other accounts needing DD's and it works fine.

Ifts

blinko wrote: »

has anyone thought about setting up a charity donantion for £1 per month by DD

On one of the other 123 threads some posters on there were stating that there is a cost to the charity to process a Direct Debit.

If correct then it may not be a good idea for just a £1 DD, maybe set up the DD amount to cover the costs at the very least.

EDIT: here is the post from the other 123 thread 'Santander 123 Accounts Only Two Per Person' on DD costs -

innovate wrote: »

Please be aware that it costs at least 50p, more likely a lot more, to process a direct debit.

(i have no way of knowing if this amount is correct though)

blinko

does anyone on here have any knowledge of cost to process DD, ?

I'm in need of a new DD as I am moving over 1 from halifax reward and really not sure on the next step.