Direct Debit for £1 a year - does it qualify?

tryin

Hi all

I saw this website https://smalldirectdebit.co.uk offers direct debits for £1 a year. They claim that if I use it I will qualify for the interest and cashback on the Santander 123 account.

Has anyone tried using direct debits which don't pay out monthly on the Santander account? What was your experience?

I used it once for a bank transfer, and that worked, but maybe an offer for ongoing benefits is different.

Neil_Jones

If you'd read the account features properly the requirements for cashback are two active direct debits. Not two that actually pay out. A direct debit is active for 13 months. Also note pay in requirements.

As for the interest on 123, I wouldn't bother. Better returns elsewhere and have a Lite instead. See elsewhere on the forum.

tryin

Are you sure active doesn't means that it actually pays out every month? They have a whole list of offers here https://smalldirectdebit.co.uk/cheap-direct-debits/ which all require a monthly direct debit. Are you sure Santander is different?

colsten

Neil Jones gave you correct information.

smalldirectdebits would naturally want you to use a monthly payment, as that means more money for them.

If I didn't have enough of my own savings accounts that I can feed with DDs, I'd rather give my DDs to a registered charity than to smalldirectdebits.

tryin

colsten wrote: »

Neil Jones gave you correct information.

smalldirectdebits would naturally want you to use a monthly payment, as that means more money for them.

Actually, smalldirectdebits did say that for the Santander account the yearly direct debit is good. Just wanted to confirm with someone who tried it.

colsten wrote: »

If I didn't have enough of my own savings accounts that I can feed with DDs, I'd rather give my DDs to a registered charity than to smalldirectdebits.

So would I, but I don't think there is any charity which you can give less than £1 a month. This website has direct debits for £1 a year, so I would be paying £11 less.

colsten

Using a 1.5% AER 123 account would cost you a heck of a lot more than £1 a year. Just to re-iterate what Neil Jones already said about the 123

As for the interest on 123, I wouldn't bother. Better returns elsewhere and have a Lite instead. See elsewhere on the forum.

tryin

You ignored what I wrote in response. Who has a better interest while offering the same cashback?

crumpetman

If you must have a single account then the 123 fits the bill, but if you are willing to have two accounts (or more!) then a 123 lite (for the cashback) and a Marcus savings account will get you more money.

You save £48 a year by changing to 123 lite (£1 per month fee instead of £5 but still get the cashback) and lose only a tiny amount in interest with Marcus savings (1.45% vs 1.5% which is a difference of about £10 a year on £20k)

You should be at least £38 a year better off.

colsten

tryin wrote: »

Who has a better interest while offering the same cashback?

Nobody has said that such an account exists.

You can get the same cashback with a 123 Lite. You can get 1.45% interest without paying a monthly fee, at Marcus. There's even 3% AER without a fee at TSB, albeit on £1,500 max only.

tryin

Then I need to store the cash in one account, transfer it just before each bill is due. Makes life complicated. And besides, the lite also has the same direct debit requirement, which brings us back to my original question, which seems to have been answered.

I suppose I'll go with the direct debit for £1 a year, and hope it works. The website which offers it looks a bit weird, but the actual direct debits are with GoCardless, so no risk there. I couldn't find anyone else who offers yearly direct debits. Little debits only has monthly. All the charities only have monthly. And charities normally have long forms where you need to put in all your details. Then they send you letters in the post...

soulsaver

I'm not clear on what your doing here:
The Sanatnder cash back is on direct debits for Council tax, telephone, broad band, energy and Santander mortgage.

If you're getting cb on them why do you need other DDs?

And if you still do, read here where there is lots of options... https://forums.moneysavingexpert.com/discussion/5734632/savings-accounts-accepting-dds