Santander 123 good - but is MSE in error?

thewoodgnome

I have Santander 123 account (2 actually) to take advantage of their 3% interest rate for savings.
MSE site says if you have £20,000 in the account, they pay 3% on the entire balance. I think that is in error. 3% interest does not cover the entire balance. The Santander paperwork indicates otherwise. Here's how I understand it to work:
£0 - 999 gets 0%
£1000 - 1999 gets 1%
£2000 - 2999 gets 2%
£3000 - 20,000 gets 3%

Santander show these limits regardless of how much the total in your account is.

So, assuming someone keeps £20,000 in the account, they will get 3% on the £17,000 between £3000 and £20,000 but correspondingly less on the first £2,999 of their savings.
I still think the 123 account is a pretty good deal at the moment and am grateful for MSE originally telling us about it. Just wanted to correct the "3% on the entire balance" statement.
Regards,
thewoodgnome

SeduLOUs

Once you hit a tier, that rate is paid on the entire balance. If you stick an average balance of £3000 into their interest calculator it churns out an annual interest payment of £89.

http://www.santander-products.co.uk/banking/calculator/123ca.html

Small print from that page confirms it also:

1.00% AER/gross (variable) on your entire balance, once your balance is £1,000 or over. 2.00% AER/1.98% gross (variable) on your entire balance, once your balance is £2,000 or over. 3.00% AER/2.96% gross (variable) on your entire balance, once your balance is £3,000 or over (up to a maximum of £20,000). Interest rates will apply on the first £20,000 of your entire balance once you have at least £1,000 in your account.

bsms1147

You understand incorrectly, the interest is on the full balance.

If you have £2,500 you will receive 2%* on the full balance.

If you have £20,000 you will receive 3%* on the full balance.

(*give or take, and minus tax)

Welcome to the site.

thewoodgnome

I stand corrected! Thank-you for the good news!
Regards
thewoodgnome

agrinnall

thewoodgnome wrote: »

I stand corrected! Thank-you for the good news!
Regards
thewoodgnome

Perhaps you could make up for your error by updating your thread title.

SeduLOUs

agrinnall wrote: »

Perhaps you could make up for your error by updating your thread title.

Not sure that's necessary as thread title is a question not an accusation...