Santander 123 interest rate going from 3% to 1.5%. Where to put my money now?

bigfreddiel

I'll be keeping our joint account, and downgrading our two individual accounts, leaving only a few hundred pounds in both. The £40k will be split with half going into p2p and the other half going into a balanced portfolio, albeit outside of an ISA because it's been maxed out.

Cheers fj

apt

dolphin19 wrote: »

We only opened our 123 account in May so this is a blow but with the maximum of £20000 in and VERY high bills (4 adults living in our household) it is still the best way of earning interest for us - we have earned £194 since the end of May. I will check back in November and see if there are any better deals with other banks but will stick with Santander for now.

It isn't better than accounts paying 4-6% and you could switch to the Santander 123 to keep the cashback.

ColdIron

apt wrote: »

It isn't better than accounts paying 4-6% and you could switch to the Santander 123 to keep the cashback.

Will those accounts still be paying their current rates come November? The only 6% accounts I know are regular savers which are hardly appropriate for lump sums

YorkshireBoy

ColdIron wrote: »

Will those accounts still be paying their current rates come November? The only 6% accounts I know are regular savers which are hardly appropriate for lump sums

But for a couple, it wouldn't take long to get a good bit of the £20K into them at £1,600 a month.

But I think the inference was that some of them have fixed rates, eg Nationwide. Also I would have thought it unlikely, although not impossible, that Lloyds would cut from 4% to sub 1.5% and TSB by a similar amount? And those would take the entire £20K, as it seems like some joint relationship exists (talk of "we").

As I said above, I'd be looking to establish the accounts now, rather waiting to "see what's available" come November...especially those which are fixed.

djpailo

There is a five year bond from Yorkshire/ Clydesdale which gives 2.2% AER which isn't too far off the 2.7% you get from Santander (after account for the fees). The downside is you won't have access to the money, but 2.2%, given the other banks are reviewing what they are offering, may actually be quite handy this time next year. We have to hope regular savers will remain quite high, but TSB reduced theirs not long ago so better to open the others while they remain 5-6%.

The best thing to do right now regarding the Santander account and the money in it is not to make any rash decisions and just see what happens with regards to the other banks come November before thinking about switching out.

2010

bigfreddiel wrote: »

I'll be keeping our joint account, and downgrading our two individual accounts, leaving only a few hundred pounds in both.

There`s still the £5 monthly fee on both to pay, why keep them open?

YorkshireBoy

2010 wrote: »

There`s still the £5 monthly fee on both to pay, why keep them open?

How is there? The accounts are being downgraded (presumably to 'Everyday'). Even if they were being downgraded to 'Lite' (which would be pointless!) there's only a £1 fee.

bigfreddiel

2010 wrote: »

There`s still the £5 monthly fee on both to pay, why keep them open?

No fee on their basic accounts, and the small amount in them won't lose me much interest.

Doing it so Santander still have the pleasure of running my accounts for free, just a small protest, but if millions of us do it, who knows.....

Cheers fj

Ballard

bigfreddiel wrote: »

No fee on their basic accounts, and the small amount in them won't lose me much interest.

Doing it so Santander still have the pleasure of running my accounts for free, just a small protest, but if millions of us do it, who knows.....

Cheers fj

Your protest is presumably because rather than paying 2.5 over base they'll only be paying 1.25 over base. It's a national disgrace.

lippy1923

I know the 123 accounts weren't making Santander any money, but its still a blow to many customers. The base rate only dropped by 0.25% yet they reduce the interest by 1.5%.


You can be pretty sure if the rates increased by 0.25% they would only increase their rates by 0.25% or not at all. The 123 account seems almost pointless now imo.