Replacement for Santander 123

jenny2009

After cutting back my spending on direct debits the £5 account fee is now 3p more than my cashback, though with a balance of approx. £17,000 I am getting just over £20 a month interest.


Is there one single bank account with no fee that I could switch to so that I am still getting over £20 a month interest?


I will soon be losing a couple of the direct debits so I will soon be only getting £1 cashback.


I am getting to old to have the hassle of multiple bank accounts, I now want to keep it simple.

enthusiasticsaver

There are no high interest (high interest is tongue in cheek as none are high now) current accounts paying out on £17k other than Santander 123. You would need more than 1 to get £20 interest as most only pay interest up to maximum £5000.

AndyPK

consider bank of scotland.
I don't know if you can still open 3 accounts.

£5K x3
2%
2 DD each
No fee

plumduff55

You could open a Santander 123 Lite account. The monthly fee is only £1 and you do get the same monthly cash back. You are not paid interest on the balance. I am in the same position as you so have decided to change to the Lite account and deposit my money in a savings account somewhere - I've still to research best ones. You can also have a regular saver linked to this account. The interest is 5%.

I shall be watching this thread with interest to see if anyone comes up with other ideas xx

AndyPK

RBS do 2% cashback with no monthly fee

Think NatWest is the same

surreysaver

I have done the same as plumduff. Downgraded the 123 to a Lite, and put my £20k elsewhere (offset mortgage). As I am now earning just over £1k per year in interest, it was no longer advantageous to earn 1.5% on £20k, so I am better off saving 1.25% in mortgage interest instead.

ValiantSon

jenny2009 wrote: »

After cutting back my spending on direct debits the £5 account fee is now 3p more than my cashback, though with a balance of approx. £17,000 I am getting just over £20 a month interest.

If your account fee is 3p more than your cashback then the account is costing you 36p a year. That is hardly a lot! On £17,000 that would give you a gross interest rate of 1.498%, i.e. you will get almost exactly the same interest as you would if the cashback wasn't 3p short of the account fee!

jenny2009 wrote: »

Is there one single bank account with no fee that I could switch to so that I am still getting over £20 a month interest?

Not in an easy access account, no. The best is currently paying 1.3%. If you locked it away for a year in a fixed rate savings bond then you could get 1.82% with OakNorth Bank, but you would have no access to the money for the duration of that 12 months,

jenny2009 wrote: »

I will soon be losing a couple of the direct debits so I will soon be only getting £1 cashback.

That puts the rate at 1.22%. You can get better in an easy access account (as above). However, if you opened a regular saver with Santander and drip-fed £200 per month from the 123 account into there then you could realise a combined rate of around 1.5%, thus beating the easy access account again, but not the fixed rate savings bond.

jenny2009 wrote: »

I am getting to old to have the hassle of multiple bank accounts, I now want to keep it simple.

How much hassle is it really?

Keep it "simple" by all means, but then accept that you will get lower returns.

plumduff55

Hi again, I've been looking into this and I'm thinking of going for an NS&I Guaranteed Income Bond paying 1.45% interest on a 1 year bond and 1.90% on a 3 year bond. Interest is paid monthly and all or part of the bond can be withdrawn at any time with loss of 90 days interest. This account would be good if you could afford to lock your money away but in an emergency at least you know you can access it albeit with loss of some interest.

I'm not rushing into this - still researching xx