Santander 123 current account

Xiarrr

Hi all,

I was curious about the Santander 123 account. I've read the MSE blog on how it is only worth it at balances over £9600 but had a look on their website where they have a calculator

At £1,000 the monthly cashback is 83p or £10/year
At £2,000 the monthly cashback is £3.30 or £39.60/year
At £3,000 the monthly cashback is £7.40 or £88.80/year

Does this not mean at balances of over £3k or more it is worth it? Or is this to do with income tax on top?

Thanks all

YorkshireBoy

You may be confusing interest with cashback?

£3,000 in the account all year will earn £90 (it's compounded don't forget) interest. Deduct the £60 fees and you're left with £30, giving a return of 1%. May as well put your cash in a 1% savings account!

molerat

You have to factor in the £5 per month fee. £3000 therefore only gives you £2.40 per month or 0.96% which can easily be beaten with other providers.

Xiarrr

Ohh I see, thanks for your answers, that is much clearer. Hmmm I think the calculator tries to combine the idea of both cashback and interest and hence doesn't show a true reflection.

Archi_Bald

The 123 calculator will give you a true account of how much cashback and interest you can earn on the numbers you give the calculator. It won't take off the £60 fee, nor will it tell you if/that you can earn more money with other banks.

Have you looked at the cashback you can earn with Natwest/RBS?

Doctor_Duke

I think you have to look at BOTH the cashback and credit interest on the 123 account. RBS only provide cashback but no interest on credit balances and even they have a monthly £3 fee for the Reward Account. I can always meet and exceed the Santander fee by cashback alone on my DDs.

NectarCollector

Archi_Bald wrote: »

It won't take off the £60 fee, nor will it tell you if/that you can earn more money with other banks.

Have you looked at the cashback you can earn with Natwest/RBS?

The calculator does show the total monthly/yearly interest and cashback after the £5 charge has been deducted.

the calculator will ask for everything (monthly bill amounts eligible for cashback and total balance in account)