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This is why I wanted to know what happens if i don't pay the £500 minimum every month.
At the moment, if my main job pay went directly into that account, it would be a lot more than £500 a month. I wondered if I should have my pay sent directly to another account and I just pay £500 into the 123. Or something?
If you have a 123 and at least one other non-Santander account (such as HSBC) then you can simply bounce £500 out of and back into the 123 every month to satisfy the funding requirement, it doesn't really matter where your salary actually goes in initially.
I'd keep the HSBC open at first, then maybe use it to get £100 by switching it to a bank paying £100 for switches.
I wouldn't have an overdraft; I would have a credit card - and make sure it's paid in full every month. This gives you a month after an emergency payment to find the money, before you have to pay any interest, unlike with an overdraft.
If you don't pay the £500, you don't get the interest, but so long as you've got £500, or even £250, or £100, you can take it out and put it back in again. Having a second bank account helps with this, but is not essential.
If times are hard, you can drop your balance below £3000, and have less interest, but this is cheaper than paying interest elsewhere.
EcoMiser Saving money for well over half a century
