Santander 123 rate to be cut to 1.5%

darkidoe

Unfortunate. I just started a 5% regular saver with them, so will probably keep the account going for another 12 months at least. Will need to just keep the minimum amount to earn the interest to pay for the account. It might well still be useful for a dumping account for excess/short term parking spot for cash not stashed in other higher interest accounts.

[Deleted User]

Cornucopia wrote: »

It can still be the 1-2-3 account...

ONE account per customer
TWO percent interest across the board
THREE cashiers at lunch

Or a free copy of this for every customer.

bristolleedsfan

darkidoe wrote: »

Unfortunate. I just started a 5% regular saver with them, so will probably keep the account going for another 12 months at least. .

Or open Everyday current account to go alongside regular saver, those with a non Santander account to switch to E.C.A can get 31.00 cashback via http://www.imutual.co.uk/search?q=santander&search_label=Search

http://www.santander.co.uk/uk/savings/regular-esaver

"funded from your Santander current account"

eskbanker

JGUK wrote: »

I will have to rethink my balance in Santander, which is a shame.

So as someone stated above after fees and with no cash back DDs taken into consideration we're at roughly 1.7% if they go through with it ?

Up to 1.7%, which only applies for a balance of £20K (let's ignore the AER v gross issue for these purposes) - lower balances will earn a lower percentage because the £60 annual fee is fixed, hence the other example given of £5K earning 0.8%. A balance of £3K currently earns £30 interest after fees, i.e. 1%, but if the rate changes to 2% would only earn exactly the same £60 that is charged in monthly fees, so an effective rate of 0%....

roddydogs

Heres a great idea, why not wait to see if the actually drop it, you will get 60 days notice, then you can decide what to do.

fun4everyone

Martin Lewis article on how the account would look to savers if the rate was cut to 2%

http://blog.moneysavingexpert.com/2016/07/27/if-santander-123-drops-interest-to-2-is-it-still-worth-it/?_ga=1.226359770.15506781.1455698639

In the article he says the rumours are credible and speculates the 2% is most likely to happen if the base rate is cut.

colsten

Martin_Lewis wrote:

My suspicion is the reason it’s had to put plans in place early is because Santander 123 is not like a normal savings account. Its entire marketing, even its 1-2-3 name, dictates the rate. So it’d need a special plan and permission from the regulator, the FCA, to change it.

That sounds rather far-fetched, and more speculation. No bank ever needed the permission of the FCA to change interest rates, and the T&Cs clearly allow for it. Aside from unfounded claims on the internet claiming the 123 was called so because of the interest rates it offered, there is no evidence to believe that the account name dictates the interest rates.

karlie88

colsten wrote: »

Aside from unfounded claims on the internet claiming the 123 was called so because of the interest rates it offered, there is no evidence to believe that the account name dictates the interest rates.

The name is based on the account's interest rates, as well as cashback rates on household bills.

From an interest rate point of view:

- 1% interest on balances from £1000
- 2% interest on balances from £2000
- 3% interest on balances from £3000

mapk

bristolleedsfan wrote: »

Or open Everyday current account to go alongside regular saver, those with a non Santander account to switch to E.C.A can get 31.00 cashback via http://www.imutual.co.uk/search?q=santander&search_label=Search

http://www.santander.co.uk/uk/savings/regular-esaver

"funded from your Santander current account"

I have a Regular e-Saver with around 8 months till maturity, currently funded from a 1-2-3 account. If I close the latter, I wonder if I can switch the monthly £200 standing order to fund from an Everyday current account.

Yorkshire_Pud

If the Santander123 Lite account can be called 123 but pay no interest it may indicate that the 123 in the Santander123 account doesn't refer to the interest rates (unless it suits Santander at the time);)

1 Reel em in with high interest, cashback and moderate monthly fee
2 Increase the monthly fee, then a few months later cut the interest rate (and maybe later the cashback rates)
3 Hang em out to dry