Santander 123 to slash interest to 1.5% – should you ditch it?

jodie264

My mum passed away and left me £30,000. I'm going to keep around £5,000 available to spend on house and garden but am unsure where to put the rest. Split between bank accounts, ISA, leave in 123 account and decide nearer to November ? I'm 61, have no other savings and get £840 monthly paid into 123 (teachers early pension) and still need to work (pension date April 2020!).

Consumerist

jodie264 wrote: »

My mum passed away and left me £30,000. I'm going to keep around £5,000 available to spend on house and garden but am unsure where to put the rest. Split between bank accounts, ISA, leave in 123 account and decide nearer to November ? I'm 61, have no other savings and get £840 monthly paid into 123 (teachers early pension) and still need to work (pension date April 2020!).

It's the same dilemma for all of us. Until we know what other banks intend to do and when, no plan can be certain.

Obviously, don't leave more than £20k in Santander123 but it's probably the best option for £20k until November. The problem is that what little remains as an alternative may be even less by November if the movers and shakers are piling out of Santander and into other options in the meantime.

Thinking longer term, it might be wiser to move now before other banks pull up the drawbridge on what little they offer now.

pesdgk

A helpful piece, thanks. In it you say that on joint accounts you can gain interest on £60k rather than £20k, can you point to where this is noted on Santanders terms as it's news to me? NB. I appreciate you can have two separate accounts, ie £40k (£20k+£20k), but the £60k on joint accounts is a new one to me. Thanks

Consumerist

pesdgk wrote: »

A helpful piece, thanks. In it you say that on joint accounts you can gain interest on £60k rather than £20k, can you point to where this is noted on Santanders terms as it's news to me? NB. I appreciate you can have two separate accounts, ie £40k (£20k+£20k), but the £60k on joint accounts is a new one to me. Thanks

Hi pesdgk and welcome to the forum.

You don't say who told you that but it's one sole and one joint 123 account per person. A couple can therefore have three between them.

Redcent

I also cashed in my Account I never liked having to keep 20k in a Current Account I used for every day transactions. I only got about a £1 a Month of cash back. The 123 account has become a bit to much of a risk for 1.5% interest - £60 a year for the fees and the other strings & hoops they want account holders to jump through.

Consumerist

Redcent wrote: »

I also cashed in my Account I never liked having to keep 20k in a Current Account I used for every day transactions. I only got about a £1 a Month of cash back. The 123 account has become a bit to much of a risk for 1.5% interest - £60 a year for the fees and the other strings & hoops they want account holders to jump through.

Yes, I switched the 123 account to Co-op Bank for £4 pm "Everyday Reward" so I am £9 pm better off plus £150 switching incentive without earning a penny of interest. The 123 balance was transferred to an ISA for 1.4% pa.

Shame the party is over, though.