Santander 123 Account Advice

Jesc

Hi,

I've been looking at switching my current account to the Santander 123 account but I am not sure whether I qualify and could do with a bit of advice. I have read everything on the MSE regarding the Santander 123 account but am still unsure on a few things.

Basically, do you have to have two direct debits from the account or is that optional? I don't have any direct debits at present so if this is necessary can anyone suggest any bank accounts where this doesn't apply?

Jessica Caroline

YorkshireBoy

Jesc wrote: »

I have read everything on the MSE regarding the Santander 123 account but am still unsure on a few things.

You won't be when you read the official account T&Cs (or even the 'at a glance' section) on their website!

Basically, do you have to have two direct debits from the account

Yes, but they don't have to pay out each month.

I don't have any direct debits at present

There are some savings accounts that allow deposits by DD. Tesco is one.

so if this is necessary can anyone suggest any bank accounts where this doesn't apply?

BoS Vantage. Same 3% rate, but with a lower £15K max (3 accounts at £5K per account).

TSB & Nationwide (for 5% AER), but I'm guessing you have more than £4.5K...otherwise you wouldn't be considering Santander with it's £2 a month fee?

eskbanker

YorkshireBoy wrote: »

Jesc wrote: »

Basically, do you have to have two direct debits from the account

Yes, but they don't have to pay out each month.

Strictly speaking the answer to this question is "no", although of course you won't earn any interest without the two DDs....

YorkshireBoy

eskbanker wrote: »

Strictly speaking the answer to this question is "no", although of course you won't earn any interest without the two DDs....

I'm able to read between the lines!

lejog2003

I can't vouch for this, since I also have my utilities dds on this account to earn cashback, but if you have a Paypal account and use the 123 account as the registered bank account, Paypal sets up 2 direct debits (or at least has for me).

One entitled "Paypal Payments" is the one they actually use to take payments, the other entiitled "Paypal UK" remains unused in my case.

How long (or whether) Santander would accept the second dd for interest payment purposes, I know not.

Archi_Bald

lejog2003 wrote: »

Paypal sets up 2 direct debits (or at least has for me).

One entitled "Paypal Payments" is the one they actually use to take payments, the other entiitled "Paypal UK" remains unused in my case.

How long (or whether) Santander would accept the second dd for interest payment purposes, I know not.

This makes little sense. Paypal normally just set up 1 DD for 1 current account. But the real issue is that Paypal does not pull any money automatically, and a DD that hasn't been used for 13 months can get cancelled by the bank under the DD dormany rules.

I don't understand why people faff about with Paypal when it is so easy to set up automatically paying DDs on Tesco savings accounts.

Jesc

Thanks for all the comments.

I have sought out the official T and C's for Santander 123 and it is making more sense now so U appreciate the heads up on that.

I shall definitely consider the tsb and BoS current account options too as they contain some more leanient rules.

I he Dr thought of Paypal as a direct debit source but that would be great if it would work so I shall investigate!

I was also thinking would the iCloud storage subscription count as a dd?

Also, I have to stress that I am not that bright when it comes to Fiancial decisions as I have always kept with the same bank since the age of 16 (I am now 26!) so excuse me for probably asking a really obvious question it why would I need at least £4,500 to be considering the Santander account due to the £2 a month fee? Surely if I had the minimum in there of £3,000 it would be worthwhile as a year I would be earning around £75 after tax which is more than I would be paying for the account as that is £24 a year so I would be in profit ouldn't i? Please help here as I am no financial guru t all?

I mean initially I would deposit all the money I have (£15,000) into the 123 account but then of April I was going to out that in an ISA by which time I will have earnt another £2,000 and leave that in the 123 account? Is this a good idea?

Archi_Bald

Jesc wrote: »

I mean initially I would deposit all the money I have (£15,000) into the 123 account but then of April I was going to out that in an ISA by which time I will have earnt another £2,000 and leave that in the 123 account? Is this a good idea?

Why put any money into a cash ISA?

What are you saving for? When will you need your money?

Even the official MSE guide now recommends current accounts and regular savers before you consider ISAs. http://www.moneysavingexpert.com/savings/which-saving-account

YorkshireBoy

Jesc wrote: »

why would I need at least £4,500 to be considering the Santander account due to the £2 a month fee?

Because you can make 5% AER on a max £4.5K elsewhere without DDs. Santander is only 3% AER, and the effective return is reduced by the £24 annual fees.

I mean initially I would deposit all the money I have (£15,000) into the 123 account but then of April I was going to out that in an ISA by which time I will have earnt another £2,000 and leave that in the 123 account? Is this a good idea?

I'm guessing your savings are to be used in the short to medium term, ie for a house deposit?...rather than for retirement!? So your priority, whilst recognising your self-confessed finance limitations, really ought to be maximising returns over that timescale. And you won't do that with an ISA these days. You need to be saving in high interest current accounts and regular savers.

Jesc

Ah okay that makes sense now regarding the £4,500!

I may look into keeping that as a maximum in a current account then and putting the rest in a saver?

The only reason I was mentioned an ISS was because my father kept harping on about me needing one but I didn't think it was such a good idea these days what with the rubbish return rates.

Maximising my savings is the main priority for the near future as I plan to use the money for educational purposes primarily. And don't worry that educatin in no way will be linked to finances you'll be pleased to know!

YorkshireBoy

Jesc wrote: »

Maximising my savings is the main priority for the near future

Then you should read the article that Archi linked to above. It's entitled "Get the max interest from every penny you've got".


And then see if you still want an ISA or a "saver".