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

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  • bristolleedsfan
    bristolleedsfan Posts: 12,184 Forumite
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    smjxm09 wrote: »
    I can only see interest paying bank accounts going one way and this is downwards and I can't see them recovering for a few years. With other savings rates also dropping I have decided to bite the bullet and go for a couple of 5 year deals. By the time they have matured hopefully things will be on the turn.

    I have opened a 5 year bond paying 2.1% with Vanquis paying monthly interest on £25,000. As my wife is not a tax paying she should get the full amount tax free. I have to fund this account within 30 days so I will wait until September.

    I have opened a 5 year fixed ISA paying 1.88% with Shawbrook and will fund it with £15240 as I will be a tax payer from next April again. This account will also pay interest monthly.

    I have acted now as rates seem to drop every day so why wait. Combining the two I will be dropping from 3% interest minus fees to just about 2% guaranteed for 5 years which is somewhat better than what Santander will be offering.

    .


    Earlier in year you would have got 5 year non ISA fix at 3.0/3.10% - 5 year ISA fix at 2.6%

    I am very glad I acted in February switching to a 5 year ISA fix at 2.6% :)
  • harz99
    harz99 Posts: 3,655 Forumite
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    smjxm09 wrote: »
    The wife and I have an account each plus a joint account. Total investment is £60,000. We have also maxed out all other bank accounts paying interest so the question is what to do.

    The 3 Santander accounts cost us £180 in fees but earn £106 in cashback each year so we are £74 short which drops the 1.5% interest rate to a lower figure but I have no idea what to.

    I can only see interest paying bank accounts going one way and this is downwards and I can't see them recovering for a few years. With other savings rates also dropping I have decided to bite the bullet and go for a couple of 5 year deals. By the time they have matured hopefully things will be on the turn.

    I have opened a 5 year bond paying 2.1% with Vanquis paying monthly interest on £25,000. As my wife is not a tax paying she should get the full amount tax free. I have to fund this account within 30 days so I will wait until September.

    I have opened a 5 year fixed ISA paying 1.88% with Shawbrook and will fund it with £15240 as I will be a tax payer from next April again. This account will also pay interest monthly.

    I have acted now as rates seem to drop every day so why wait. Combining the two I will be dropping from 3% interest minus fees to just about 2% guaranteed for 5 years which is somewhat better than what Santander will be offering.

    I will move all the direct debits from the 3 accounts into the joint account and close the other 2. This will then at least cover the £5 fee with an extra £3.83 cashback.

    We've done similar but not 5 years, a 2 year with Paragon and a 3 year with Vanquis. Before you close the Santander accounts maybe you could use one or both to switch to other ban ks and bag one or two switching bon uses?
  • smjxm09
    smjxm09 Posts: 663 Forumite
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    Yes I have thought of that but thanks for the reminder. I did that by opening a M&S account last year so I will probably do it with First Direct.
  • KTF
    KTF Posts: 4,820 Forumite
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    3.x%+ is available from ratesetter at the moment.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    KTF wrote: »
    3.x%+ is available from ratesetter at the moment.

    Or 12-14% from platforms with more transparency and security, the choice is yours.
  • KTF
    KTF Posts: 4,820 Forumite
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    bigadaj wrote: »
    Or 12-14% from platforms with more transparency and security, the choice is yours.
    Which ones are those?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    minislim wrote: »
    but with them hiking the fee's wasn't that meant to cover the losses?

    More likely to lose the customers they didn't want.
  • polymaff
    polymaff Posts: 3,910 Forumite
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    eskbanker wrote: »
    Just to benchmark the starting point for your analysis, the £60K would earn £894 in interest at 1.5% AER (1.49% gross), so reducing that by your £74 shortfall is a return of £820 on £60K = 1.366666[...]%

    True - for a non-tax-payer. 1.336% gross for a basic rate tax-payer. :(
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    KTF wrote: »
    Which ones are those?

    Money thing, Ablrate, Savingstream though the latter has lost some support.

    Several others as well, have a read on the p2p independent forum.
  • KTF
    KTF Posts: 4,820 Forumite
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    bigadaj wrote: »
    Money thing, Ablrate, Savingstream though the latter has lost some support.

    Several others as well, have a read on the p2p independent forum.
    Thanks. Will have a look at them.
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