Santander 1-2-3 still worth it?

wolvoman

I'm toying with the idea of ditching one of our Santander 123 current accounts (possibly the joint one).

After taking into account the cost of maintaining direct debits and the monthly fee, I am earning 27p less per month in this account than I would be if I kept that £20k in my mortgage offset.

So the only reason I haven't closed the account already is in case Santander decide to reverse (or partially reverse) the interest rate cut from a couple of years ago, especially given the current climate of slightly rising BoE base rates.

Even if the 123 account rose to 1.6% I'd be in profit.

I know it's tiny amounts of money but just wondering what the thoughts are here on whether Santander are even remotely likely to raise the rates on the 123.



PS. I gain all the cashback on my main 123 account, so I'll keep that open for now.

colsten

Can you downgrade it to a Lite, or even to an Everyday account? You might be able to upgrade it again, as and when it makes financial sense.

eschaton

I was going to downgrade to Lite and put the £20k into a 1 year bond with Atom, but the rate dropped from 1.95% to 1.80% so I'll hold off at the moment.

tg99

wolvoman wrote: »

I'm toying with the idea of ditching one of our Santander 123 current accounts (possibly the joint one).

After taking into account the cost of maintaining direct debits and the monthly fee, I am earning 27p less per month in this account than I would be if I kept that £20k in my mortgage offset.

So the only reason I haven't closed the account already is in case Santander decide to reverse (or partially reverse) the interest rate cut from a couple of years ago, especially given the current climate of slightly rising BoE base rates.

Even if the 123 account rose to 1.6% I'd be in profit.

I know it's tiny amounts of money but just wondering what the thoughts are here on whether Santander are even remotely likely to raise the rates on the 123.



PS. I gain all the cashback on my main 123 account, so I'll keep that open for now.

I’m in a very similar situation to you with two 123 accounts and likewise it wouldn’t take much of a rate increase to make my second one profitable again (versus rates I can get elsewhere). So although technically on pure numbers it would make sense to downgrade or close my second account, it would only currently save me c£15-20 pa so I have kept for now incase Santander increase the rate or maybe they could reduce the £5 pm fee. I don’t think either is likely anytime soon but given that I may not be able to re open a second one (I opened it not long before they changed t and c to prevent people having more than one sole account) then am just going to keep for now.

roxy28

Well i am now going to close my 123 account but transfer my £20k out before i close, is it best to transfer say 4 amounts, so less chance being blocked by the fraud dept although its all above board.

polymaff

roxy28 wrote: »

Well i am now going to close my 123 account but transfer my £20k out before i close, is it best to transfer say 4 amounts, so less chance being blocked by the fraud dept although its all above board.

The best thing I reckon you can do is to either make the payment to an already-used payee - or create the new payee and pay £10 today, then your bigee tomorrow.

polymaff

@OP

Are the direct debits really an issue? Remember that these do not need to be monthly payers - and most of us have a surfeit of such non-monthly DDs.

This topic has been discussed in many threads. The conclusions all seem to be the same. As far as interest is concerned the game isn't worth the candle at present so close down to one 123 lite

SeeMe

polymaff wrote: »

@OP

Are the direct debits really an issue? Remember that these do not need to be monthly payers - and most of us have a surfeit of such non-monthly DDs.

This topic has been discussed in many threads. The conclusions all seem to be the same. As far as interest is concerned the game isn't worth the candle at present so close down to one 123 lite

Even the 123 lite has a monthly charge but can be done online, i was going to downgrade to a basic account but this has to be done in branch it seems and for me i cant be mitherd being interagated again.

ValiantSon

If cashback on your direct debits is at least covering the account fee then Santander 123 still has much to recommend it, i.e. no easy access savings account pays 1.5% on a balance up to £20,000. If, however, the account fee is not covered by cashback then argument for getting rid of the account becomes much stronger.

Neil_Jones

ValiantSon wrote: »

If cashback on your direct debits is at least covering the account fee then Santander 123 still has much to recommend it, i.e. no easy access savings account pays 1.5% on a balance up to £20,000. If, however, the account fee is not covered by cashback then argument for getting rid of the account becomes much stronger.

It's not 1.5% after the £5 a month fee though, it's closer to 1.2%. Which can be beaten.

ValiantSon

Neil_Jones wrote: »

It's not 1.5% after the £5 a month fee though, it's closer to 1.2%. Which can be beaten.

Please read my post again. I said that if the cashback covered the fee then it was paying 1.5%. This statement is absolutely correct. It is only 1.2% if you get no cashback to off-set the fee.