Santander 123 3% account

Herbalus

Ryan_Futuristics wrote: »

The thing is you really need to be targeting at least 5-6% interest to make saving worthwhile at all

Factor in tax and inflation and you're still losing money with these accounts - and the fact they're all limited on how much they'll pay interest on means you're not getting any long-term compounding benefits on your savings beyond a point (unfortunately inflation is unconstrained in this respect)

Cash has always been a loser's game - a good temporary store of capital, but there's no way to actually grow your savings that doesn't involve investing in something

I think you're trying to be difficult. People need cash. You have cash in your current account - why not earn interest on it?

What about the retired who transition to a more cautious and less volatile outlook as they use their cash and don't want to lock it away? What about wanting a good return on a rainy day fund (which everybody should have in cash)?

And as for inflation, the RPI hasn't been above 3% since September 2013, and CPI hasn't been above 3% since April 2012.

I'm a big fan of the 123, and combine it with other accounts to get about 4.8% average across all my savings. That's near your 5% mark with instant access, no volatility, and it's easier to understand than all your 'noise' about which funds I should/shouldn't be investing in, and all the 1%+ charges that go with it.

Rollinghome

3% gross returns 2.4% net to a basic rate tax payer. The latest figures show the CPI up just 0.30% and RPI up 1.10%. That's a real return so savers haven't done quite as badly as they might feel.

As Herbalus points out there are also other current accounts paying slightly more and the actual rate of inflation experienced will be different for each of us.

Of course it's impossible to know if that real return will be quite as good over the next 12 months. Whether there will be a positive return on risk investments, or a loss, is similarly unknown.

jimjames

Ryan_Futuristics wrote: »

The thing is you really need to be targeting at least 5-6% interest to make saving worthwhile at all

Factor in tax and inflation and you're still losing money with these accounts - and the fact they're all limited on how much they'll pay interest on means you're not getting any long-term compounding benefits on your savings beyond a point (unfortunately inflation is unconstrained in this respect)

Cash has always been a loser's game - a good temporary store of capital, but there's no way to actually grow your savings that doesn't involve investing in something

While I'm a great advocate of investing this does seem to be a rather picky post. If you need to hold cash you might as well find the best way of doing so that gives the best return.

Why settle for 0% on a current account when you can get 3% or 5% that pays more than a savings account or cash ISA.

mgarl10024

Oldgeek wrote: »

If you are opening a Santander 123 bank account, don't put any money in until you are certain that a minimum of two direct debits have been received. To immediately take advantage of the 3% rate I deposited a large sum after arranging for the DDs to be transferred. There was a delay in receiving one of the DDs. this resulted in a loss of 30.00 interest because no interest is paid until they have the DDs! I have discovered that there is a tab at the top in online backing which shows the status of the DDs.

Perhaps, as a new customer, it would be worth discussing this with Santander? As you had done everything you could to try to meet the requirements (and such things were delayed through no fault of your own) they may make an offer of goodwill. Worth a quick phonecall IMO.

Vortigern

wallbash wrote: »

The bigger problem, don't go over the £20,000

wallbash wrote: »

Interest is not payed on the amount above 20.000

Interest is not paid on the cash in my pocket but I don't lose any sleep over it.

A bigger problem would be dropping below the £3000 threshold, or failing to meet the conditions for interest payment.