Santander 123 - Do I get interest without active Direct debits?

YorkshireBoy

Sipowicz wrote: »

Am I receiving the interest? Oh yes, £50 plus every month!

I'm not sure how?...

April, June, September, & November will pay (gross)...£20,000 x 2.96% / 365 x 30 = £48.65

And February will pay (gross)...£20,000 x 2.96% / 365 x 28 = £45.41

So that's 5 months of every year of the 4 you've held the account (ie just under half the time!) that you've done better than the rest of us. How? Maybe that's another error on their part?

I don't remember if they shift the statement dates each month (weekends/Bank Hols/etc), but even if they did...£20,000 x 2.96% is still only £592 over the year, so (divided by 12 is) £49.33 a month average.

colsten

Sipowicz wrote: »

I've had the 123 account for over 4 years, they've never levied the £2 monthly fee, I haven't queried why!

Perhaps you were on a pre-launch trial that was kept secret until now? The 123 current account was officially launched less than 4 years ago, in March 2012.

Sipowicz

How? 3% on £20,000 plus the cashback on household bills.

Sipowicz

I should add, I don't pay tax.

YorkshireBoy

Sipowicz wrote: »

How? 3% on £20,000 plus the cashback on household bills.

OK, you've included your cashback in the £50 plus figure. Originally you'd talked about interest only.

BTW you can't earn 3% if you've the full £20K in there as you can't benefit from compounding. Its 2.96% as I illustrated above.

colsten

Sipowicz wrote: »

How? 3% on £20,000 plus the cashback on household bills.

Sipowicz wrote: »

I should add, I don't pay tax.

If you have £20,000 in the account all the time, you cannot get 3% interest as your interest isn't compounding. In any case, all interest is calculated using the gross rate, which is 2.96% for the 123 on £20,000. Whether you pay tax of not doesn't impact the gross rate and the AER. Cashback does not alter the interest rates of the 123, neither does the £2 monthly fee.

It is impossible to make "£50 plus every month" in interest from £20,000 in a 123. As it is impossible in this point of time to have held a 123 account for over 4 years.

Sipowicz

Ok, I've held the account since it opened. I guessed 4 years!
I should have made it clear it was interest plus cashback.
Apologies for any confusion.
I'm spot on about the lack of paying the £2 per month charge though!
I'm thinking of using it as a subscription for membership of the Hair splitters society! :-)

Kernel_Sanders

Sipowicz wrote: »

I'm thinking of using it as a subscription for membership of the Hair splitters society! :-)

Why not join the Exaggeraters' Society instead ?

ciscosurplus

I setup the account in March, but didn't get round to doing any direct debits until July. I got interest on the balance, the £2 fee only kicked in when I setup 2 direct debits