Potentially new 123 customer

w00519772

Does anyone have experience with the santander 123 account? It pays an intrest rate of 3%

I have 30000 stored in a current account paying no intrest. I plan to use this money which I have saved over a long period for a mortgage.

I have an agreement in principle for a mortgage with HSBC. I am planning to create a new account 123 account with santander. I will then use the money for a mortgage (very soon) and leave the account open long term. Are there any pitfalls doing this assuming that I pay at least 500 into the account every month and setup at least two direct debits?

dreaming

I opened my 123 account last month and have received the first interest payment. Cashback on the DDs covered the £2 charge (and a little more) and have had no problems. I did not use the switching service though. Just cancelled the DDs from my old current account provider and set up new ones. All sorted within couple of weeks.

YorkshireBoy

w00519772 wrote: »

It pays an intrest rate of 3%

I will then use the money for a mortgage (very soon) and leave the account open long term. Are there any pitfalls doing this assuming that I pay at least 500 into the account every month and setup at least two direct debits?

Unless you plan on keeping more than £3K in the account you won't make 3% interest. Just in case you didn't know?

w00519772

dreaming wrote: »

I opened my 123 account last month and have received the first interest payment. Cashback on the DDs covered the £2 charge (and a little more) and have had no problems. I did not use the switching service though. Just cancelled the DDs from my old current account provider and set up new ones. All sorted within couple of weeks.

Thanks. Do you have any other current accounts? Do you have a mortgage and is it with santander?

If I transferred 30k today and then wanted to transfer it back in a few weeks (to pay the deposit of a mortgage), then woul there be any obstacles/charges?

YorkshireBoy

w00519772 wrote: »

If I transferred 30k today and then wanted to transfer it back in a few weeks (to pay the deposit of a mortgage), then woul there be any obstacles/charges?

You need to get the OTP* sorted before making large payments, or pay for a CHAPS transfer (the cost of which will almost wipe out your £34 return below!).

But if you're only talking a few weeks is it worth the hassle? I mean, 4 weeks at 3% AER will only make you £34.

One final thing...it doesn't sound like you're aware of the £20K cap for interest earning purposes on the account. Time to do some reading up?


* See their website.

dreaming

w00519772 wrote: »

Thanks. Do you have any other current accounts? Do you have a mortgage and is it with santander

I also have a Nationwide FlexDirect from which I transfer to Santander (and back again) to fulfil the external credit obligations. No mortgage as I have recently paid it off following retirement. Agree with Yorkshire Boy that you need to understand the terms & conditions, and the time span you require.

There are lots of threads here and on the Budget/Current Accoun thread so get reading:)

standinman2009

I have 4 of these brilliant interest rate where else can you get 3% with monthly interest !

YorkshireBoy

standinman2009 wrote: »

I have 4 of these brilliant interest rate where else can you get 3% with monthly interest !

Lloyds Vantage
BoS Vantage
TSB Enhance

and 4% with Yorkshire/Clydesdale Bank

and 5% with Nationwide

And no £2 per month fee with any of them!

Archi_Bald

Anyone who pays Council Tax, Gas, Electricity, phone and/or broadband by DD can very easily make £2/mth in cashback. More likely quite a bit more. Thus the monthly £2 fee at Santander doesn't have to present an obstacle.

However, I agree, if the total horizon is all of 3-4 months, why bother.