Santander 123 current account fees rising to £5 in January

Archi_Bald

olip74 wrote: »

Consider that the interest rate is 3% in perpetuity rather than a 1 year fix

The Santander 123 interest rate isn't fixed for 1 year. It is variable, and they can change it, and/or the amount you get it for, at any time with 2 months notice.

olip74 wrote: »

Just do the sums and compare. You may find it's still the best product for your needs!

That is highly unlikely. That Santander 123 was never the best deal in the market in terms of paying interest for people like cmondynamite who say they "can't get close to having a balance of £20,000, and won't get enough from the other benefits to make it worthwhile".

olip74

Archi_Bald wrote: »

The Santander 123 interest rate isn't fixed for 1 year. It is variable, and they can change it, and/or the amount you get it for, at any time with 2 months notice.

I didn't say it was fixed, my point was that saver accounts are. When comparing accounts I think you have to make some assumptions/judgements. The whole USP of the account is that it pays 3% interest (and 3% cashback of course) - I think they'd be more likely to vary the level at which 3% kicks in than to change the rates.

Archi_Bald wrote: »

That is highly unlikely. That Santander 123 was never the best deal in the market in terms of paying interest for people like cmondynamite who say they "can't get close to having a balance of £20,000, and won't get enough from the other benefits to make it worthwhile".

cmondynamite didn't say how much money they had. £6k is nowhere near £20k but, with that amount (on average) in a 123 account you will be no worse off (from Apr '16) than you would be if you had the account now. And you wouldn't be able to put that much in any of the other top current accounts.

I only encouraged cmondynamite not to just write the account off without doing the sums.

Archi_Bald

olip74 wrote: »

cmondynamite didn't say how much money they had. £6k is nowhere near £20k but, with that amount (on average) in a 123 account you will be no worse off (from Apr '16) than you would be if you had the account now. And you wouldn't be able to put that much in any of the other top current accounts.

Comparing the current Santander 123 with the future Santander 123 completely misses the point that even the current Santander is not, and never was, as good a deal in terms of interest as several other accounts.

[Deleted User]

olip74 wrote: »

I only encouraged cmondynamite not to just write the account off without doing the sums.

Yes, I have done the sums, and the Santander 123 account doesn't work for me at all. I have looked at all the options in terms of balance I can maintain, the interest paid, and now the increased monthly fee. Just not worth it for me. Thanks for the advice though.

Archi_Bald wrote: »

Comparing the current Santander 123 with the future Santander 123 completely misses the point that even the current Santander is not, and never was, as good a deal in terms of interest as several other accounts.

Thanks Archi Bald, the Santander account is not as good a deal as some of the accounts I can consider, given the balance I can maintain. Thanks.

saver861

Its still likely to be a good deal for most that can max out the account with £20k. Instant access etc etc. Clearly, £20k split in 4 x Lloyds accounts at 4% will be better than 1 x Santander at 3%.

As always, do the Math!

I'm surprised that anyone is surprised at Banks etc roping in their customers and then increasing charges. These accounts are lost leaders and are in effect part of their marketing costs. In this case it has been unchanged for about three years so, as these things go, that's pretty acceptable. Cookie won't always crumble right way up and for those who have just joined Santander recently they will feel a bit miffed. It happens.

The point of these forums is to be savvy and get the best of what is going at the time. When it is no longer good, move on.

Archi_Bald

saver861 wrote: »

Clearly, £20k split in 4 x Lloyds accounts at 4% will be better than 1 x Santander at 3%.

That's not an option as even if you are sharing your money with someone else you are only allowed one sole and one joint each, i.e. 3 Club Lloyds max.

But other accounts are available, and there is nothing that says you can't have accounts with more than one bank. In fact, it's a smart thing to have, to "insure" against technical problems that occur occasionally.

phillw

saver861 wrote: »

Its still likely to be a good deal for most that can max out the account with £20k. Instant access etc etc. Clearly, £20k split in 4 x Lloyds accounts at 4% will be better than 1 x Santander at 3%.

Also if you were paying attention when TSB launched the 5% account you'd have two of those with £2000 each in (you can only open one now). Every other year you can get 5% at Nationwide on £2500.

I've never been tempted to open a 123 account for the interest, although after losing my AA 3% fuel "cashback" card I was thinking of opening one for a free 123 credit card for 12 months. But now the numbers just don't add up. I'll just switch my fuel to stoozing like everything else (unless I can use TSB contactless of course).

saver861

Archi_Bald wrote: »

That's not an option as even if you are sharing your money with someone else you are only allowed one sole and one joint each, i.e. 3 Club Lloyds max.

Yes thats true which is what we have. However, some posters above have referred to having more than 3 accounts, so I'm assuming they must be referring to Aunt Nellies etc.

Archi_Bald wrote: »

But other accounts are available, and there is nothing that says you can't have accounts with more than one bank. In fact, it's a smart thing to have, to "insure" against technical problems that occur occasionally.

Indeed. I have a number of accounts and have standing orders setup round robin so it all works neatly.

phillw wrote: »

Also if you were paying attention when TSB launched the 5% account you'd have two of those with £2000 each in (you can only open one now). Every other year you can get 5% at Nationwide on £2500.

I've never been tempted to open a 123 account for the interest, although after losing my AA 3% fuel "cashback" card I was thinking of opening one for a free 123 credit card for 12 months. But now the numbers just don't add up. I'll just switch my fuel to stoozing like everything else (unless I can use TSB contactless of course).

Got the Nationwide option also - coming near the end of its year so will need to move it. I will be giving back the Santander CC as I don't do the mileage now and the charges are not justified. I'm with you on the stoozing - with the long interest free and zero cost balance transfers becoming popular again, its the way to go.

Rollinghome

Meanwhile at Tesco, the account fee is abolished (for those not paying in £750 pm).
http://www.independent.co.uk/news/business/news/tesco-takes-on-santander-by-scrapping-5-current-account-fee-10501788.html

moneyfoolish

Rollinghome wrote: »

Meanwhile at Tesco, the account fee is abolished (for those not paying in £750 pm).
http://www.independent.co.uk/news/business/news/tesco-takes-on-santander-by-scrapping-5-current-account-fee-10501788.html

So, according to this article, I can stop paying in £750 per month and still get 3% on my £3000. Is that true?