Santander 123 vs Lite, are my sums right?

Purpleheart

I have £10,000 in my 123 account but it's occurred to me that with the yearly £60 fee I'm making £90 in interest, if the money was in an account paying 1% interest then I'd have £100 . Therefore I should change to a Lite account and the best paying savings account I can find.

Can someone just confirm my sums are correct please.

Rheumatoid

Purpleheart wrote: »

I have £10,000 in my 123 account but it's occurred to me that with the yearly £60 fee I'm making £90 in interest, if the money was in an account paying 1% interest then I'd have £100 . Therefore I should change to a Lite account and the best paying savings account I can find.

Can someone just confirm my sums are correct please.

That's what quite a few including me seem to be doing and jumping to Marcus

Purpleheart

Thank you, I now have 7 regular savers on the go so I have less and less savings in my 123.

I think I shall be another one jumping ship.

metrobus

Yes you are correct you are getting in effect 0.9% after the fee.

Even with £20k we only get 1.2%.

Switched over to the lite about a year ago put £20k into NS&I bond at 2.2% so £200 a year better off minus the £12 I still pay for the sant lite acc.
Santander has become a waste of time especially after today when they have announced their regular saver has dropped to 3% with a pathetic £200 a month limit.

Zero_Sum

I have £10k across 2 x tesco accounts, tsb & nationwide earning me £380 a year in interest. Even before marcus, the full 123 was never worth the extra £4 a month.

crumpetman

Does it not matter how much you will keep in the 123 lite account? If you have over £3k in the 123 account the interest would pay for the extra £4 a month fee compared to the lite account.

eskbanker

crumpetman wrote: »

Does it not matter how much you will keep in the 123 lite account? If you have over £3k in the 123 account the interest would pay for the extra £4 a month fee compared to the lite account.

No, that doesn't matter, because in the Lite scenario being discussed, that £3K would be earning 1.5% in a separate easy-access savings account like Marcus, thereby achieving the same interest as a full-function 1-2-3 but without the extra fee.

PRAISETHESUN

Change to a 123 lite account, use that account for cashback on DDs only, and then transfer the £10k into an easy access savings account - plenty of options paying 1.0-1.5%, or more if you are prepared to lock the funds away for a while. Best of both worlds - and you still keep access to the 5% regular saver

RG2015

PRAISETHESUN wrote: »

Change to a 123 lite account, use that account for cashback on DDs only, and then transfer the £10k into an easy access savings account - plenty of options paying 1.0-1.5%, or more if you are prepared to lock the funds away for a while. Best of both worlds - and you still keep access to the 5% regular saver

Sadly, the 5% regular saver has been discontinued with the replacement now only paying 3% for new accounts.

crumpetman

But you are going to have some money sitting in the lite account earning zero interest. If you average higher than £3k then you may as well have the full 123 account as you will be no worse off compared to lite plus Marcus.

If you have less than £3k in the current account then lite plus Marcus works out better

RG2015

crumpetman wrote: »

But you are going to have some money sitting in the lite account earning zero interest. If you average higher than £3k then you may as well have the full 123 account as you will be no worse off compared to lite plus Marcus.

If you have less than £3k in the current account then lite plus Marcus works out better

£3000 @ 1.49% in Marcus is £44.70 interest per year.

If the average amount sitting in the 123 account is £300 then we need to look at the income and costs for an average balance of £3,300 in it.

£3,300 @ 1.49% is £49.17 less the annual fee of £48.00 (£5 per month less £1 per month).

Which is better, £1.17 per year or £44.70 per year?