Santander 123 rate to be cut to 1.5%

Ronaldo_Mconaldo

This is not good for me. I'll just use all the money to pay off my mortgage instead then. Was good when I had a mortgage at 2.29% and the 123 account at 3% - the mortgage is with Santander too actually. They're pretty much paying me for buying thr house now.

savings_my_hobby

Kendall80 wrote: »

I've just sent them an instant message for confirmation. They probably wont tell me anything but its worth a shot. Time to start calculating if 2% is worth it over their £5 fee.

If you dripfeed £200 per month into their 5% monthly saver then that should offset the £5 fee.

2% is poor but there seems to be a trend towards lower rates so it may be worth holding on to this account for when the others drop their rates. I hope this is all rumor and speculation.

HornetSaver

The way Santander have packaged the 123, it was a no-brainer savings and current account for most people with savings above a certain level.

Once the numbers have been crunched I'm sure there'll be guides for the savviest next step for people who had maxed out 123 accounts and make use of the cashback. But as things stand, there isn't a one-stop shop for these people. If you're talking cashback alone Natwest might come out on top, if you're talking interest alone you'll probably end up splitting the balance into several places (predominantly current accounts).

So on the face of it Santander might have pulled a masterstroke over the past couple of years from their perspective. But there is one flaw. People who accept a fee-paying account in a market which is almost exclusively fee-free, are the ones who are disproportionately likely to understand what they're getting in return for their money. Dropping the interest rate is understandable in the current circumstances, and ordinarily banks wouldn't bat an eyelid about doing so regardless of the wider economic situation - run a loss leader, hit your targets, make a profit out of those who overstay. As MSE-ers we know this is an inevitability and simply try to stay one step ahead - sadly we are in a minority.

What's unusual about this drop is that it comes with the caveat that the overall customer base is disproportionately likely to ditch and switch if better options are out there.

bristolleedsfan

savings_my_hobby wrote: »

If you dripfeed £200 per month into their 5% monthly saver then that should offset the £5 fee.
.

Monthly Saver can be operated in conjunction with non fee "Everyday Current Account"

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

"The instant access savings account funded from your Santander current account"

darkidoe

So is this official then? I need to start plotting my own interest rates preservation if it is.

djpailo

Nothing changes for us. We always evolve. Its the name of the game. We just move on and put our money in the best accounts available. No denying its disappointing if this goes through, but if that is the way it is, so be it.

teddysmum

darkidoe wrote: »

So is this official then? I need to start plotting my own interest rates preservation if it is.

When questioned by AOL, about the article in the Mail, the Santander rep refused to comment but said any change would have 60 days' notice.

Argghhh

vacheron wrote: »

Well that would be another inconvenience if true. I've just opened and filled our second 123 after a lot of calls and follow-ups from the local branch. I wondered why they were suddenly being so pushy about signing up new accounts!

On top of that a letter from HSBC yesterday telling me their Advantage ISA (the only ISA I had that was still worth holding ) is to drop again from 1.2% to 0.8% at the end of September.

I guess that will have to go somewhere too, though I'll leave £1 in there to still get the £10 per month bonus.

The way things are going I'm half inclined to spend the ISA on general living costs over the next year or two and sacrifice all my taxable salary into my pension instead!

u only get the £10 a month for 12 months anyway i got same email
- i have just opened new isa with coventry bs at 1.3% and moved all money to it

Argghhh

MARTYM8` wrote: »

You do wonder how long we will have these high interest current accounts.

Clydesdale/Yorkshire have dropped their 2% current account direct.

Will TSB/Nationwide/BOS/Tesco/Lloyds and co drop their rates or will the regular saver products linked to HSBC/FD/M&S etc be scaled back too?

m+s have amended the t+c of the regular saver that you have to have direct debits active on main account to qualify for regular saver account - i dont have enough direct debits to spread around to do this so next year i wont be using m+s

YorkshireBoy

Argghhh wrote: »

m+s have amended the t+c of the regular saver that you have to have direct debits active on main account to qualify for regular saver account

That's not the only amendment. You also need to have switched to them using the CASS.

- i dont have enough direct debits to spread around to do this so next year i wont be using m+s

DDs are very easy to come by, as a 10 minute peruse of the threads on here will confirm. It just comes down to how badly you want the regular saver. For me, with Santander ready to drop to 2%, any account I could get to help increase my aggregate interest rate would be worth going for (and jumping through necessary hoops for).