Santander Zero account costing me £150pa

Gizmo247

I have satisfied the eligibility criteria for the Santander Zero account ever since I opened it. (i.e. pay in £1,000pm, 2 DDs, £10,000 savings @1.5%) I still use it for day to day spending with an average of £1,000 balance (@1%).

I keep the Zero account going as it is the only 'free' account I have left and gives me free cash withdrawals worldwide.

I'm just wondering if it really worthwhile keeping it? Considering that:

a) Switching to using my Nationwide FlexPlus account (@3%) and dumping the savings into my mortgage (@2.79%) will save about £150
b) I would not lose access to my savings as it is an offset mortgage
c) The FlexPlus account also gives me free worldwide cash withdrawals too as part of the £10pm fee

As a halfway house, I could move the savings and break the eligibity criteria and so risk losing the free foreign withdrawals.

So:

Would you pay £150 a year to keep a free account that gives free foreign withdrawals?

What value do you put on a Zero Account, considering once lost, it's lost forever?

Have Santander ever downgraded a Santander Zero account? Banks are in a 'cleanup' mood at the moment. I know there are those that have not met the criteria for quite a while and I've never heard of anyone being downgraded. Anyone have experience of this?

eskbanker

Gizmo247 wrote: »

Would you pay £150 a year to keep a free account that gives free foreign withdrawals?

Only if the annual net benefit from free foreign withdrawals exceeded £150! And this would be the net benefit over the many other ways of getting cheap money abroad, as per http://www.moneysavingexpert.com/travel/cheap-travel-money, so my answer would be 'no'....

getmore4less

what does a foreign withdrawal cost?
how many are you doing.

For cash my DC is costing 3% + £1.50 fee but tend to use a nationwide CC for most things, Europe is cheap and take the bigger hit using it in the US, doubt it costs me £150 year in charges.

YorkshireBoy

I'd be closing the account, or at least taking my chances of them not downgrading it when I stopped meeting the criteria.


Time to move on (and make/save more elsewhere).

Aquamania

Gizmo247 wrote: »

...
What value do you put on a Zero Account,...

For me, the clue is in the name

Never had one, never wanted one, never needed one.

Plenty of 'free' personal current accounts to choose from out there. I don't tend to withdraw cash abroad (despite often travelling abroad). How much/often do you need to withdraw cash abroad and what is it really worth to you?

benjus

Aquamania wrote: »

I don't tend to withdraw cash abroad (despite often travelling abroad).

Just curious, but if you go abroad a lot, how do you pay for things? Is this business travel with everything covered by expenses?

Aquamania

benjus wrote: »

Just curious, but if you go abroad a lot, how do you pay for things? Is this business travel with everything covered by expenses?

Most things are covered by a credit card (flights, hotels, meals, gifts, petrol, etc)
I take a little cash (already converted here in UK) with me to cover expected cash spend which is small - perhaps an odd drink in a bar - lots of drinks and you can pay the bar tab (which is normal in most other countries) on the credit card anyway

Yes, a lot of my travel is on business and this is generally recovered on expenses (but I still have to pay it up front and then recover it - a travel advance is available on request, but that effectively is just a loan which has to be paid back)

Business travel is also is a good opportunity to get some more cheap cash if necessary e.g. when going with colleagues to a meal or drinks, I offer to pay the whole bill on my card and others give me the cash for their share.

(Our expenses system works on an individual submission basis, so if two of us share a meal, we are both expected to submit expenses even if supported by a photocopied bill - but I know not all employers may work like this)

benjus

I put all business expenses on my corporate card - paying and claiming back is possible, but strongly discouraged for people who have a corporate card, and more of a pain to do.

Still, I do my best to avoid changing cash in the UK, as you can generally do much better using a fee-free card in an ATM abroad. I have a Metro Bank debit card which serves this purpose well (although it's now only free in the SEPA area).

bsms1147

Dump it and get a Halifax Clarity credit card for the occasions you do withdraw cash (+- spend) abroad.

Gizmo247

Thanks for all the replies so far.

As, it happens, I don't use the Zero Account for foreign cash much as it is my day-to-day card (don't normally like to mix UK and foreign transactions). So I usually take it as my "back at the hotel" cash card.

I already have a Clarity Credit card but I've never used it for cash withdrawals as I've always had two foreign free debit cards (FlexPlus & Zero).

If I get rid of the Zero Account, then the Clarity would probably become my single "back at the hotel" cash and credit card backup but I do worry about what the effect of drawing foreign cash from a credit card would be as cash advances get reported to the CRAs. I suppose if it is being used as a backup then I'm desperate anyway (e.g. been pick-pocketed)

The reason I asked the question in the first place is that you can see from my signature, I'm almost have a positive net worth but if I leave the savings in place to keep the Zero Account going I'll need another £17,000 of further saving just to fully offset the mortgage and stop using it to service credit card bills.

What I was hoping I wasn't going to get and in fact didn't get were any comments like "No, keep it, you'd be a fool to let it go!". It's just strange that something that looks free, does actually cost me money and totally gets in the way of what I want to achieve.

I also wonder how long before Santander downgrades them all to Everyday accounts as the Zero campaign was replaced by the 123 campaign years ago. Also the banks keep saying the days of the free account is over.

So my plan is to say, "to hell with the eligibility". I'll keep the account ticking over and still use it as a foreign cash backup, move the savings into my mortgage and fully offset, use the FlexPlus as my main account and my 123 account as a savings/DD/SO/CC buffer.

Gizmo247

Just as a follow up. I decided to apply my rule of last resort to decide if I'm going to keep a product or not. It is to pretend that I don't have it in the first place and pretend that the product is about to be withdrawn so would I act to take it up (hypothetical as Zero is already gone but the logic works).

So would I take up a Zero Account given that you need to pay in £1000, keep two Direct Debits and deposit £10,000 in Santander savings account for ever. All to get 1% on account balance, commission-free cash withdrawals worldwide and no bank charges. The answer would be "No". Not sure why it was "Yes" back then, perhaps I had £10,000 knocking around and the ISA rates were pretty good.

So I have decided to run the gauntlet and risk losing the Zero account, transfer the bulk of my savings into my offset mortgage so I am now fully offset. The money I'm saving in interest will pay for the Nationwide Flex Plus fee to get the same worldwide commission-free cash withdrawals and more.

Fully offset is not quite mortgage-free but it is a step in the right direction. :-)