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MSE News: Santander 123 rate to be slashed to 1.5%

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  • badger09
    badger09 Posts: 11,286 Forumite
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    ic451uk wrote: »
    If keeping £20,000 in the account as a savings account, all other things being equal the November situation (ignoring tax and cashback) will be:
    Interest on £20,000 at 1.5% = £300, less £60 account fee = £240
    Interest on £20,000 in the top rate RCI account (1.2%) = £240
    Therefore, unless RCI drops its rate, the only difference between RCI and Santander is the cashback. However, if this is less than £5 per month, it may be better to go for the Halifax Reward current account (£5 per month reward subject to criteria).
    Therefore, I would suggest the following actions come November:
    Average more than £5 cashback per month? Stick with Santander.
    Are other high interest current accounts worth it (e.g. Club Lloyds) given they may well follow Santander's lead? Switch to the best one available at the time.
    Otherwise, put savings in RCI and open a Halifax Reward Account.

    IC

    However, RCI accounts are not covered by FSCS, but by the French equivalent. That would be an issue for many of us who were affected by the Icelandic crisis:cool:

    If you've exhausted all other higher interest current accounts and RSs I wonder at what point you start to consider Premium Bonds ?
    Of course PB are not a guaranteed win but the prize fund is supposed to be 1.25 % so on £20,000 = £250 with the chance you could win higher....and lower of course.
    If the £5 fee for Santander isn' t covered by cash back you will get £238...
    If fee covered you will get £298..

    Hmmm.....

    That's assuming the PB annual fund prize rate doesn't also drop;)
  • Snowbelle
    Snowbelle Posts: 353 Forumite
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    Dont forget anyone who also has a regular savings account with them this needs to be funded from a Sandanter Current account so this may delay any decisions on closing the 123.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    Snowbelle wrote: »
    Dont forget anyone who also has a regular savings account with them this needs to be funded from a Sandanter Current account so this may delay any decisions on closing the 123.
    Downgrading takes less than 10 minutes. No need to "close".
  • sharpharp
    sharpharp Posts: 167 Forumite
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    Pat yourselves on the back Brexit voters, you kicked this off....


    Deffo ditching and going back to stocks and shares/Peer lending.
    It was bad enough Santander having the cheek to up the fee to £5 a short while ago, and now this..... Santander can go do one, i'm Brexitting Santander in November
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    We can effectively earn 2% in our mortgage offset account (mortgage is to fund house loan to daughter and she pays us interest) so we'll find a decent home for a few £k to cover bills etc. and slam the rest into the offset account.

    But not until November.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • karlie88
    karlie88 Posts: 9,114 Forumite
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    sharpharp wrote: »
    Santander can go do one, i'm Brexitting Santander in November

    Don't you mean Santexit?

    Or if you're feeling fruity, Sexit. :eek:
    :grouphug: :D Official MSE canny forumite and HUKD VIP badge member :D :grouphug:
  • harz99
    harz99 Posts: 3,653 Forumite
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    Snowbelle wrote: »
    Dont forget anyone who also has a regular savings account with them this needs to be funded from a Sandanter Current account so this may delay any decisions on closing the 123.



    Agreed, for people with three 123 ACs you can pay both RS accounts from the joint 123 if needed.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    I did a three year fixed at 1.5%, and a five year fixed at 1.75% in April 2016, and braced for impact.

    Do people really want to wait till BOE hits 0.1%?

    ISA allowance is going up to £20k, for 2017/18, I think.
    Are we being herded into S&S ISAs?
  • badger09
    badger09 Posts: 11,286 Forumite
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    gadgetmind wrote: »
    We can effectively earn 2% in our mortgage offset account (mortgage is to fund house loan to daughter and she pays us interest) so we'll find a decent home for a few £k to cover bills etc. and slam the rest into the offset account.

    But not until November.

    Hope that doesn't take you over your PSA gadgetmind:cool:
  • skybluesaver
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    Is it possible to switch the 123 current account to the lite account without losing the benefit of paying into the monthly saver?
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