Santander to slash 123 account interest and shake up overdrafts

vigman

wiseonesomeofthetime wrote: »

I was not aware of that and I hold the same product.

Will seek out closer to April then as have a sum of money waiting to go in for next year's allowance.

Thanks

Thanks. The rate drop was on January 3rd:

"We got in touch recently to let you know that we're reducing the interest rate on your account(s) on 3 January 2020. We explained why we're doing this and showed your new rate at a glance.

If you don’t have a note of these details, you can find your new interest rate(s) on our website."

Vigman

maman

vigman wrote: »

Thanks. The rate drop was on January 3rd:

"We got in touch recently to let you know that we're reducing the interest rate on your account(s) on 3 January 2020. We explained why we're doing this and showed your new rate at a glance.

If you don’t have a note of these details, you can find your new interest rate(s) on our website."

Vigman

I've got an ISA with Coventry too and I've heard nothing about a rate drop. Maybe it depends which Issue you've got. Thanks for the heads up though. I'll check.:)

ColdIron

JimmyTheWig wrote: »

Yes, you're right. So it would mean 4 overdraft incidents in the year for the break-even point rather than 1.

Silly me, I forgot about the changes to overdraft charges
https://www.moneysavingexpert.com/news/2020/01/santander-to-slash-savings-rates-and-shake-up-overdrafts---what-/#overdraft

maman

maman wrote: »

I've got an ISA with Coventry too and I've heard nothing about a rate drop. Maybe it depends which Issue you've got. Thanks for the heads up though. I'll check.:)

I checked and mine's still 1.5%, probably depends when you took it out.:)

Nebulous2

rufford155 wrote: »

When is everyone going to realise - including Martin - that these plummeting interest rates and rocketing fees are, by and large, the banks trying to recoup all their compensation payouts for PPI etc.
So now every customer is, in effect, subsidising those who claimed something back.
I don't want to be controversial but this is what I have concluded.

You aren’t subsidising anyone. The bank isn’t prepared to subsidise us as much as it used to. 123 costs Santander a billion pounds a year.

Banks and everyone else have been expecting interest rates to rise for years, but they are now giving up on that and adjusting their products accordingly.

eskbanker

Nebulous2 wrote: »

123 costs Santander a billion pounds a year.

Do you have a verifiable source for that?

Nebulous2

eskbanker wrote: »

Do you have a verifiable source for that?

I saw it here.


https://www.thisismoney.co.uk/money/saving/article-7894599/amp/Are-bank-accounts-benefits-thing-past-Santander-makes-cuts.html

eskbanker

Nebulous2 wrote: »

I saw it here.


https://www.thisismoney.co.uk/money/saving/article-7894599/amp/Are-bank-accounts-benefits-thing-past-Santander-makes-cuts.html

Thanks - as that article points out, it's out of date data relating to 2016, when the interest rate was still 3%, the original piece being in the FT:

Figures obtained by the FT reveal that Santander’s 123 account pays on average 2.3 per cent on a total of £50bn that customers have deposited, according to people familiar with the product.

Even taking into account the £5 monthly fee charged by the bank, which was raised from £2 earlier this year, Santander is left footing an annual bill of almost £1bn.

Not sure if there's any data illustrating the decline in account numbers since the rate was cut to 1.5% though (although I was speculating in another post that it may not have been massive), but no doubt still a significant sum being paid out, although any numbers involving multiple millions of accounts inevitably sound large!

Zero_Sum

:cool:

Nebulous2 wrote: »

I saw it here.


https://www.thisismoney.co.uk/money/saving/article-7894599/amp/Are-bank-accounts-benefits-thing-past-Santander-makes-cuts.html

In 2016 when it was paying 3%

Doesnt say what its costing now. Even then that £1bn, was it net or gross? As theyd have been generating income from all those £20k deposits.

Nebulous2

eskbanker wrote: »

Thanks - as that article points out, it's out of date data relating to 2016, when the interest rate was still 3%, the original piece being in the FT:Not sure if there's any data illustrating the decline in account numbers since the rate was cut to 1.5% though (although I was speculating in another post that it may not have been massive), but no doubt still a significant sum being paid out, although any numbers involving multiple millions of accounts inevitably sound large!

I lifted it from that article without paying much attention to it, but regardless of the headline figure, the users of 123 aren’t subsidising anyone, as the poster I was replying to claimed.

Santander provide a branch network, an app, a website, receive my salary, pay my DDs, deal with multiple cycles of money in and out to other banks each month, and give me around £9 a month for the privilege. In return I give them £1 a month, as I use the lite version.