Should I close my second Santander 123 Account ?

Justonething

I currently have two Santander 123 Accounts and a single person, you were allowed to open two at that time – one as my main account for cashback on monthly bills and the other used as an expense account for work to keep personal and work expenses separate, both paying for the monthly £2 fee. I am now reassessing finances as my situation has changed a great deal recently.

I have been saving/overpaying very hard over the past 18 months and finally managed, with my August salary, to clear all debts along with my mortgage (7 years early) and car final balloon payment (1 year early) due to the MSE advice, frugal living and inspiration from many on this website. Since August I have managed to accumulate just over £10,000 in my 2 Santander accounts without realising how quickly it was growing. However with the increase in fees to £5 per month and the decrease in my cashback ie my mortgage paid me back £10 a month and with the reduction in many of my payments such as phone, broadband and fuel (all MSE tips) I will now have just over £5 cash back across both accounts which will cover one £5 fee– so the question is do I move all the dd’s to the one account and close the other?

I aim to save £2,000 per month during 2016 and try and maximise the 4-5% loophole to build a fund of cash (for the first time ever!) then reassess at the end of 2016. At that point I will have maxed out all accounts and if I had closed the Santander would lose out on the opportunity of another £20,000 of savings at 3% but with the £5 fee I figure I’d get more in an ISA at that point? I’m a higher rate taxpayer.

I’d like to make a little bit of money to cover Xmas spending so my immediate MSE thinking is to move my dd’s to my Santander Main Account to cover the fee increase in Jan and switch the Santander Expense Account to Frist Direct for the £100 then open their 6% Saver Account, my expenses are always well over the £1,000 minimum required. I also have an old TSB basic account that I plan to switch to M&S for the £100 and then open their 6% Saver Account. I’d like to do this asap.

I am very busy at work at the moment, hence the accumulated savings but plan to sit down over the Xmas holidays and look at the other accounts needed to be opened – time, research and organisation but doable and will mean I start 2016 in the best possible position. However I'd very much appreciate your comments and advice before I close and open accounts.

HappyMJ

In your case yes I would close one of the accounts down.

Once you start exceeding £20,000 of savings you can save in alternative accounts with different providers.

If you ever repay your mortgage and the £10 cash back no longer covers the £5 fee then I'd consider closing the remaining account too.

As a single person there are enough accounts available to save in excess of £50,000 at 3% or higher so I wouldn't worry about losing the second account. Saving £5 per month would be more important.

Yes it takes time to open accounts. I do one every week and spend about an hour researching the offer, applying for the account and doing whatever is necessary to get the switching bonuses and increased rates of interest. It's well worth it.

Justonething

HappyMJ thanks for your quick reply and I appreciate your thoughts. I will switch my second Santander Account and my old TSB Account tomorrow but keep the Main Santander Account open while I still get enough cashback to cover the increased fee. Those were my initial thoughts but wanted a sanity check first.

It seems strange worrying about what to do with my money rather than how to pay my bills !

Do you mind if I ask how you manage to keep track of your accounts if you have so many ie expiry dates, minimum requirements, dd's, terms & conditions etc as they all seem to have so many different criteria ?

Mny thanks

HappyMJ

Justonething wrote: »

HappyMJ thanks for your quick reply and I appreciate your thoughts. I will switch my second Santander Account and my old TSB Account tomorrow but keep the Main Santander Account open while I still get enough cashback to cover the increased fee. Those were my initial thoughts but wanted a sanity check first.

It seems strange worrying about what to do with my money rather than how to pay my bills !

Do you mind if I ask how you manage to keep track of your accounts if you have so many ie expiry dates, minimum requirements, dd's, terms & conditions etc as they all seem to have so many different criteria ?

Mny thanks

Spreadsheets!!!! Automatic Standing Orders. DD's are all under £5 and set to go to Tesco Savings accounts. To identify which DD is which on the Tesco statement I set up the sum of the 2 DD's to be £5 with the first being a random figure between £1.50 and £2.50. The second would be £5 minus the first DD amount somewhere between £2.50 and £3.50. i.e £1.73 and £3.27. Halifax monthly rewards are £5 and therefore transferred in full to Tesco on about the 5th of the month. I then sweep the balance from Tesco Savings to Tesco Current Account every month. Easy £15 per month. I'm lucky to have 3 Halifax Reward accounts.