Santander 1-2-3 still worth it?

polymaff

RG2015 wrote: »

...

Even then, 3% wasn't that spectacular. The USP was the amount you could deposit.

The OP's enquiry, btw, was legitimate as he was going to make a longish-term re-investment. The traffic since has been about easily-reversible actions, so a prediction wouldn't really be relevant.

As for Warren B, he's snapped up the crystal ball mines

RG2015

RG2015 wrote: »

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 wrote: »

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.

Hmm, am I Mystic Meg, Warren Buffett of just a plain dreamer?

Not that I recall Warren being too concerned about interest rates since the heyday of Norman Lamont and the ERM debacle when he made a few billions overnight.

YorkshireBoy

RG2015 wrote: »

Not that I recall Warren being too concerned about interest rates since the heyday of Norman Lamont and the ERM debacle when he made a few billions overnight.

George Soros was reported to have realised a profit of approx. £1bn in the days following Black Wednesday. You'd have thought Warren Buffet would have made far more headlines if he'd "made a few billions overnight"?

ValiantSon

polymaff wrote: »

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

In what way was what I posted foolish?

Your reply is pathetic. I agreed with what you said, but explained why I didn't consider the advantage to be worth bothering about. You then decided to be rude because I didn't want to hold exactly the same view of the world as you. Aren't you a charming person!

RG2015

YorkshireBoy wrote: »

George Soros was reported to have realised a profit of approx. £1bn in the days following Black Wednesday. You'd have thought Warren Buffet would have made far more headlines if he'd "made a few billions overnight"?

Thank you for correcting me. I do remember now.

It would appear though that one old billionaire is just the same as another to me.

surreysaver

Personally I consider the 123 to be paying 1.2%, as I was earning over £1k in interest per year, so would be paying tax on it. So I moved my £20k to my offset mortgage, saving 1.25% after the interest rate went up last year

ValiantSon

surreysaver wrote: »

Personally I consider the 123 to be paying 1.2%, as I was earning over £1k in interest per year, so would be paying tax on it. So I moved my £20k to my offset mortgage, saving 1.25% after the interest rate went up last year

I assume that you mean your total interest earnings were over £1,000. That can't have been how much you were earning in one 123 account.

The fact that you were earning over £1,000 per year in interest, and were therefore paying tax on the excess, does not mean that the 123 account was only paying 1.2%. Assuming that your cashback was covering the account fee then you were earning 1.5% gross, but in your particular situation the tax you then had to pay reduced your net return to 1.2%. This is a particular situation to you, so not necessarily the most helpful advice to others, particularly as they may not have an off-set mortgage to move money into.

Were you earning that much above £1,000 in interest? You would have to have earned at least £1,300 for the entirety of the interest earned in the 123 account to be taxable. If you were then you were either holding a very large amount of cash (some of which would probably be better invested in an S&S ISA) or you have access to accounts paying currently unheard of interest rates. If, however, and as for example, your total interest was £1,100, then it would be more reasonable to say that you paid tax on one-third of the interest that you earned in Santander 123, which would equate to £20. A £20 tax bill would have reduced your effective return to 1.4%, not 1.2%. Of course, you could have earned £500 over the £1,000 limit, and this would have resulted in you having a £100 tax bill, which would reduce the effective rate to 1%. Unless your total interest earnings in the tax year were £1,300 then I'm not persuaded that your effective rate from Santander 123 was 1.2%.

RG2015

I just read the last post and now I am having to go and have a lie down in a darkened room.

ValiantSon

RG2015 wrote: »

I just read the last post and now I am having to go and have a lie down in a darkened room.

Thanks very much!

I hope you have a lovely Easter too.

(Did I miss something that said today was be rude to people day?).

surreysaver

Yes, I've earnt over £1000 in interest this year, so that means I'm only earning 80% of the interest above that, so as the 123 was the lowest paying account I have, I've downgraded it to a Lite.

It was only worth doing this, as my mortgage rate went up from 1% to 1.25% due to the increase in BoE base rate