Opening a Santander 123 account

MickyLuv

I was attracted to the Santander 123 account by the the MSE "Best Buy" info. I went to the Santander site and looked at the account details and the associated T&Cs. I also searched the MSE forums, trying to tie up the loose ends but there are still several aspects of the account that I can't quite fathom.

Please can someone help me clarify?

Once the £20,000 balance limit is reached what is the interest rate on the excess balance?

Once the £20,000 balance limit is reached, will it still be necessary to deposit £500 per month into the account?

Where the 2 Direct Debits are concerned can the Direct Debit payments be made to any external bank account? I read that PayPal was a good option and saw a list of of other finance institutions which did and didn't accept DD deposits.

I'm specifically thinking of a DD into a First Direct Regular Saver account but haven't seen this particular option discussed anywhere.

Any help with the above would be most appreciated.

Regards,

Mike

Lomcevak

MickyLuv wrote: »

Please can someone help me clarify?

Once the £20,000 balance limit is reached what is the interest rate on the excess balance?

Zero - i.e. the interest rate applies to the first £20k of you balance only, so you'd get the same interest applied if you had £20k or £40k.

Once the £20,000 balance limit is reached, will it still be necessary to deposit £500 per month into the account?

Yes, the T&Cs are quite clear on this

I'm specifically thinking of a DD into a First Direct Regular Saver account but haven't seen this particular option discussed anywhere.

FD regular saver is funded by a SO from a FD current account (with its own funding requirements - you can't have a FD regular saver without a FD current account) so not an option for meeting the 123 DD requirement.

PennyForThem_2

You can open a max of 2 - but have to comply to T&C with both. I opened 2 and have had no problems.

If you are a couple then that offers opportunities I cannot explore as a single.

ManAtHome

I have 2 as well, but they've now limited the account to 1 single plus 1 joint (dunno when, but must have been some time this year).

MickyLuv

Thanks for the help Lomcevak.

Lomcevak wrote: »

Zero - i.e. the interest rate applies to the first £20k of you balance only, so you'd get the same interest applied if you had £20k or £40k.

Sorry If I'm being a bit thick here. I think by the above you probably mean that there's 3% interest paid on the first £20,000 and no interest at all paid on on the second £20,000 in the account?

FD regular saver is funded by a SO from a FD current account (with its own funding requirements - you can't have a FD regular saver without a FD current account) so not an option for meeting the 123 DD requirement.

I do already have a FD current account but was trying to structure a theoretical inter-payment method between the FD Regular Saver account and the Santander 123 account which would satisfy both sets of T&Cs. From what you explained it still seems possible that the Direct Debit payment from Santander could be paid into the FD current account, from which the Standing Order to the FD Regular Saver account is made.

It seems like a lot of faffing for 3% interest though.
Not that 3% isn't wonderfully bountiful in this day and age.

Regards,

Mike

MickyLuv

PennyForThem wrote: »

You can open a max of 2 - but have to comply to T&C with both. I opened 2 and have had no problems.

If you are a couple then that offers opportunities I cannot explore as a single.

Yes, thanks. I suppose once I've jumped through all the hoops for the first account, one or two more might come a little easier. Santander be praised. FD too.:)

Regards,

Mike

MickyLuv

ManAtHome wrote: »

I have 2 as well, but they've now limited the account to 1 single plus 1 joint (dunno when, but must have been some time this year).

Continuing in the worshipful vein, Santander giveth and Santander taketh away, it seems.

Regards,

Mike

Archi_Bald

You cannot make a Direct Debit between a current account and the FD Regular Saver, or the FD Current account.

You must have 2 Direct Debits to get any interest in the 123. The most obvious DDs to use are those for which you get cashback. If for any reason you cannot use these, the next most obvious answer is to use a savings account or two that allows DDs to be set up. People's favourite are two Tesco accounts.

As to what you get interest on in the 123: you get no interest at all on any balance above £20,000. It's detailed on their website.

Ifts

MickyLuv wrote: »

Where the 2 Direct Debits are concerned can the Direct Debit payments be made to any external bank account?

Yes providing the external bank account lets you set up a direct debit (Tesco Bank does).

For example I have 2 Santander 123 accounts, and for the 2 direct debit (2 DD's each 123 acc) requirement I use my 1x Tesco Instant Access Savings and 1x Tesco Internet Saver.

Tesco Instant Access Savings < £1 from Santander 123/1 and 123/2
Tesco Internet Saver < £1 from Santander 123/1 and 123/2

Lomcevak

Sorry If I'm being a bit thick here. I think by the above you probably mean that there's 3% interest paid on the first £20,000 and no interest at all paid on on the second £20,000 in the account?

Yeah, that's right - interest is first £20k only. Anything above £20k gets nothing.

I do already have a FD current account but was trying to structure a theoretical inter-payment method between the FD Regular Saver account and the Santander 123 account which would satisfy both sets of T&Cs. From what you explained it still seems possible that the Direct Debit payment from Santander could be paid into the FD current account, from which the Standing Order to the FD Regular Saver account is made.

Sadly you can't transfer from Santander to FD via DD, you have to go for a SO or Faster Payments. So that transfer can't satisfy one of the 123 DD requirements. You can, however, use a pair of SOs to satisfy the funding requirements for both accounts

Usual advice is to use the Tesco savings accounts to siphon off interest from the 123 account - that gives you the two DDs you need, and keeps you under £20k too.

MickyLuv

Archi_Bald wrote: »

You cannot make a Direct Debit between a current account and the FD Regular Saver, or the FD Current account.

You must have 2 Direct Debits to get any interest in the 123. The most obvious DDs to use are those for which you get cashback. If for any reason you cannot use these, the next most obvious answer is to use a savings account or two that allows DDs to be set up. People's favourite are two Tesco accounts.

As to what you get interest on in the 123: you get no interest at all on any balance above £20,000. It's detailed on their website.

So, if I maximise the initial balance into the 123 account at £20,000 I would then need to redirect the £500 per month paid in, to an external interest bearing account such as an index tracker.

I'm just trying to model all the parts of my savings plan and the way they inter-relate before taking the plunge. If I could get a decent rate on basic savings accounts it would make life a lot less complicated,:)