Is Santander 123 still a good current account?

MusicLover28

A couple of years ago Santander persuaded me to 'upgrade' my joint current account to their 123 account for which we paid £2 per month. They have now increased this fee to £5 per month which, to my reckoning, is a 150% increase. I've complained, but their response has been a polite, but firm, 'Tough!'. Is anyone else as surprised and annoyed as me about this?

grumbler

MusicLover28 wrote: »

Is anyone else as surprised and annoyed as me about this?

Does this make any difference?

A long thread just a few lines below: Santander 123 account fee increasing to £5 from January

Mr_Goodkat

MusicLover28 wrote: »

A couple of years ago Santander persuaded me to 'upgrade' my joint current account to their 123 account for which we paid £2 per month. They have now increased this fee to £5 per month which, to my reckoning, is a 150% increase. I've complained, but their response has been a polite, but firm, 'Tough!'. Is anyone else as surprised and annoyed as me about this?

Not surprised at all, Santander launched and marketed loss leading 123 products to gain significant market share of both the current account and credit card markets and to move their brand to one offering great products as opposed to famously poor service.


It was always inevitable that they would either put up the costs or reduce the rewards with a name like 1,2,3 it would be harder to reduce the rewards than put up the price.


Whether it is a good account still or not depends on your circumstances for me it is because the cash back on direct debits plus 3% on £20k still generates good returns even when the price goes up to £5 a month. I have also fully utilised any accounts offering over 3% interest so is why I am happy with 3% on that £20k.


If people are not benefiting from the interest then purely as cash back on direct debits then the £3 a month Nat West account would be better. With modest savings a Nat West plus utilising higher interest accounts like TSB and Club Lloyds could be again a better solution than the 123 account.


As always the devil is in the detail and whilst the account is still worthwhile for me it won't be for everyone.

Neil_Jones

MusicLover28 wrote: »

A couple of years ago Santander persuaded me to 'upgrade' my joint current account to their 123 account for which we paid £2 per month. They have now increased this fee to £5 per month which, to my reckoning, is a 150% increase. I've complained, but their response has been a polite, but firm, 'Tough!'. Is anyone else as surprised and annoyed as me about this?

In all honesty it's not a surprise. £2 a month to get an average of about £49 a month back on £20k interest + cashback on top? It was a steal in 2012 when every other account going was lucky to get a rate over 1.5% and still a steal now.

Even at £5 a month, if you can maximise the interest and the cashback (see the other thread as linked above), you can still make it worth having. It's worth it for me, the linked credit card will be a waste of time for me when it switches to a monthly fee.

System

I have been with this 123 account for years and made loads of money from it with my mortgage and utility bills and community charge (got to be D.D.) and a bit of money in there at the moment as you say it has been £2 month, even at £5 a month still making loads of money it will still be worth it for me

KGriff

Neil_Jones wrote: »

Even at £5 a month, if you can maximise the interest and the cashback (see the other thread as linked above), you can still make it worth having. It's worth it for me, the linked credit card will be a waste of time for me when it switches to a monthly fee.

Yes Neil I have to agree, the wife and I have 123 current accounts and they are still well worthwhile @ £5 per month, but the 123 credit card will hardly be worth the effort @ £3 per month as we tend to make about £4-£5 per month on the shopping and petrol and it's hardly worth the effort.

I have the 123 credit card in my name, with my wife as a second card holder so in December I will pay off the card and close it and my wife will then open a new 123 credit card in her own name and I will become the second card holder on her account, that will give us another 12 months at the £2 fee rate and I think that fee is returned to the wife as part of the offer.

Well that's the plan to save us the cost of fees and the new fee increase Santander has planned for january 2016.

Yorkshire_Pud

It doesn't worry me.

These sort of changes stimulate other providers to invent new products otherwise it would all get very stale.

Lots of niche products from Tesco, TSB, Nationwide et al, most of which will suit some and at times all of us and as one product becomes lacklustre just move to another if its no longer working for you.

The 123 £5 fee is equivalent to 10% on £20K (approx;)) so .3% or 2.7% interest before any income tax.

I don't get emotional about these things I just make a point of withdrawing all my funds when things change for the worse so they 'know' I can get a better deal elsewhere:)

djpailo

I have enough in the account to make it still worthy of keeping (~15k), but by opening up other 3% accounts I wouldn't have to pay a fee at all and its something I will probably do, but I'm just spacing it out to avoid anything peculiar appearing on my credit rating by having too many credit checks in a short space of time.

So Royal Bank of Scotland x2, Tesco and TSB for "555" offer and incentive switch.

I am disappointed but it doesn't upset me or "worry" me directly. They did give ample time to decide what you want to do as well.

YorkshireBoy

djpailo wrote: »

...I'm just spacing it out to avoid anything peculiar appearing on my credit rating by having too many credit checks in a short space of time.

So Royal Bank of Scotland x2

That would certainly be a "peculiar" choice of accounts for your stated objective.


But if you meant (plain old) Bank of Scotland, then I'd go for 3 accounts (whilst you still can!).

djpailo

YorkshireBoy wrote: »

That would certainly be a "peculiar" choice of accounts for your stated objective.

I don't follow

djpailo

YorkshireBoy wrote: »

That would certainly be a "peculiar" choice of accounts for your stated objective.


But if you meant (plain old) Bank of Scotland, then I'd go for 3 accounts (whilst you still can!).

yes, that is what I meant, the problem is, opening three accounts at once probably doesn't look good on a credit check.