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A year ago Santander 123 halved its interest to 1.5% – now most should consider ditch

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Please click 'post reply' to discuss below.


  • roddydogsroddydogs Forumite
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    Wher else can you get more than 1.5% instant access, rubbish article mse!
  • roddydogs wrote: »
    Wher else can you get more than 1.5% instant access, rubbish article mse!

    The point is that if you pay your £5 fee out of the interest earned then the "effective rate" drops down to nearer 1.19% and not the headline 1.5%. And with the re-appearance of instant access savings at reasonable rates such as 1.3%, the Santander is looking very uncompetitive.
    (Although I could be wrong, I often am.)
  • Neil_JonesNeil_Jones Forumite
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    It is not a "rubbish" article, 1.5% is BEFORE fee. After fee, closer to 1.2%.

    If you want a simple life for your savings and you get cashback, then for TL;DR purposes keep the core 123 account at the higher cost, otherwise I'd suggest Liteing it and shifting the excess to a 1.3% account.
  • RG2015RG2015 Forumite
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    I have just calculated the benefit of downgrading to a 123 Lite account and transferring the £20,000 to a 1.30% easy access account is £10 per year.
  • michaelsmichaels Forumite
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    There are other cashback on direct debit bank accounts, how do they compare to the Santander lite?
    I think....
  • Mr.BoyMr.Boy Forumite
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    So what about for someone who has a large amount of cash in savings... 100-500k? I've inherited a large sum and can only get it into the ISA so fast. I realise this puts me in a minority but would still rather get the best deal I can.
  • Not worth the time involved, is it?
    I'm keeping my 123 for now.
  • dave_dphdave_dph Forumite
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    Two weeks ago I converted my 123 account to the 123 Lite. I usually earn just over £4 per month in cash back. I've moved my £20,000 to instant access accounts paying 1.25% - 1.3%.

    It's not so long ago that I was up to my £85,000 limit with various Santander accounts, including a fixed rate ISA; they now have £20 of my money - apart from at the start of the month when my direct debits are due.

    When I called to convert the account the guy on the phone said that Santander were aware they'd be losing custom.
  • harz99harz99 Forumite
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    Wife and I have both switched our personal 123 accounts away to other banks current a/c's/fixed rate savings, retaining our joint 123 account where the cashback covers the fee+, and the joint account allows us both a regular saver at a decent rate.

    Probably stay that way for at least another year, if not longer.
  • Wouldn't you have thought that all businesses should have woken up to the fact that it's more cost-effective and financially viable to retain existing customers than to target new customers? Maybe this warning shot over Santander’s bows might bring them to their senses (probably wishful thinking).

    Myself and partner have 3 x 123 accounts (£60K in total) and will be watching the market very closely. All these savings low interest rates are purely down to the huge sums of ultra-low-interest money readily available to the banks under the government’s (in collusion with the Bank of England) policy of quantitative easement, whereby the banks DON’T EVEN WANT OUR MONEY!

    In fact, it has been better to have been in debt for the last 10 years than to have been a prudent saver!
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