Santander 1-2-3 still worth it?

ValiantSon

polymaff wrote: »

You'd get enough to match the £4 a month fee savings

And more.

Would you? I haven't bothered to sit down and do all the calculations, but I assume you have, so perhaps you'd care to elucidate.

It is also worth noting that if you do adopt the strategy of splitting the money across lots of different accounts then there is the need for a number of direct debits in addition to utilities (which are being used for cashback in Santander 123 Lite) to met the requirement of those accounts, e.g. 3 DDs with Tesco and 2 with Bank of Scotland Vantage. Not everyone has those DDs, and the options for creating more have been reduced somewhat by the change in terms of Tesco's savings account.

polymaff

ValiantSon wrote: »

Would you? I haven't bothered to sit down and do all the calculations, but I assume you have, so perhaps you'd care to elucidate.

To get £4 per month on £20,000 you need an interest rate of 0.24% p.a.

So if you can get more than 1.5% minus 0.24% then I'm right.

Current Tesco Internet Saver rate: 1.3% p.a. Other easy access accounts, still active, up to 1.45% p.a.

And that is the optimum case for the 123 account. More or less than £20,000 and the argument is even stronger.

ValiantSon

polymaff wrote: »

To get £4 per month on £20,000 you need an interest rate of 0.24% p.a.

So if you can get more than 1.5% minus 0.24% then I'm right.

I never said that you weren't: I asked you to elucidate.

polymaff wrote: »

Current Tesco Internet Saver rate: 1.3% p.a.

The Tesco account effectively returns 0.04% more than the Santander account using your model. I'm happy to accept that. On £20,000 that means a greater return of £8 p.a. Of course, some will consider this worth doing, but personally, I don't. Anyone doing this should keep in mind that the Tesco rate is only at that level due to a one year bonus, so they will have to find a new home for the money after twelve months (even if that is just a new Tesco account). Again, if people want to do that to chase less than £10 p.a. then that is absolutely fine.

polymaff wrote: »

Other easy access accounts, still active, up to 1.45% p.a.

They may be still active, but they are not available to new customers so the point is moot.

polymaff wrote: »

And that is the optimum case for the 123 account. More or less than £20,000 and the argument is even stronger.

Not necessarily. Firsty, I was talking about a sum of £20,000, which many people have and are capable of managing so that excess, e.g. from interest payments, is moved elsewhere. Secondly, you are ignoring the fact that many people will use the 123 account for the bulk of their daily banking, so having a balance in excess of £20,000 is no different than operating a normal current account, where no interest is paid, and money comes in and goes out with frequent regularity.

I am not opposed to people using the 123 Lite account in the way that you, and others, suggest, but what I do object to is the assumption by some on these forums that everyone would be best off to change from the 123 account to the 123 Lite. Such an attitude is verging on the arrogant (not something I am necessarily accusing you of).

polymaff

ValiantSon wrote: »

I never ...

Dear, oh dear..

ValiantSon

polymaff wrote: »

Dear, oh dear..

What is that supposed to mean?

polymaff

ValiantSon wrote: »

What is that supposed to mean?

That I've no inclination to respond to such a foolish posting.

RG2015

wolvoman wrote: »

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

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.

I may have missed it, but has anyone offered any thoughts on the only question that the OP actually asked?

I have two 123 accounts and two regular savers and am considering downgrading one or both to the Lite account. My statement dates are 7th and 8th so I will not do it before then so I get my full month's interest for the £10 I will be paying on the 7th and 8th.

I personally doubt that the Santander 1.5% will increase. However I am expecting easy access savings accounts to start offering more in the near future. Perhaps even 1.5% before May is out.

YorkshireBoy

RG2015 wrote: »

I may have missed it, but has anyone offered any thoughts on the only question that the OP actually asked?

I personally doubt that the Santander 1.5% will increase. However I am expecting easy access savings accounts to start offering more in the near future. Perhaps even 1.5% before May is out.

I too doubt that they'll increase the rate. Their USP is that the 1-2-3 is a one-stop account for all your banking needs - reasonable interest and most households will be able to virtually offset the fee with cashback I'd have thought.

For Joe Public (not the regulars on this board) it's a great account. For the MSE regulars on here it's not so good!

On the savings account rates I don't share your view I'm afraid (but would be happy if proven wrong!). We had 1.45% (BM) and 1.35% (Tesco) recently, but even Tesco dropped back to 1.30% and PO dropped down from 1.30% to 1.05% with Online Saver 29.

polymaff

RG2015 wrote: »

I may have missed it, but has anyone offered any thoughts on the only question that the OP actually asked?

Like others, I expect, my crystal ball has lost its horizontal hold.

RG2015

polymaff wrote: »

Like others, I expect, my crystal ball has lost its horizontal hold.

Fair point, but some experts on here may have some insights into a scenario that might include a business plan where Santander increase the interest rate on their 123 account.

It is probably the case that the original 3% was based on attracting customers and perhaps specifically customers with a spare £20k.

Does Warren Buffet succeed because he has a gold plated crystal ball or two?