Santander to slash 123 account interest and shake up overdrafts

badger09

vigman wrote: »

Firstly, I'm not complaining about the rate I'm simply asking advice on what to do now with our three Santander 123 accounts after the 1% and reduced cashback kick in.

Second, for the time when we were getting 3% and then even 1.5% on the £20k x 3, the interest and cashback were probably as good as most mainstream accounts? I say mainstream as I would not put my money into the unknown Bank of Diddlysquat just because it paid 0.5% more.

I should have listened to my own advice here years ago about gold when I was buying Krugerrands for £400 and they are now selling for around £1800!

Vigman

Someone has already pointed out that there's no need to make a hasty decision.

You currently have £60k in full fat Santander 123s. Do you really need that much on instant access? I suspect not.

In which case, if you want to keep things simple, why not change one 123 to a Lite. Move as many cashback generating DDs as possible to it (subject to max payment £5pm per category from May). Pay in minimum £500 pm, or enough to cover your DDs so you don't need to worry about overdraft charges.

Then put however much you might need in the next 12 months into the highest instant/easy access account you can find.

Then split the rest into 2 or 3 and put it into the best 1/2/3 year Fixed Rate accounts you can find.

You might also want to go through the same thought process if you have substantial savings in your cash ISAs;).

rufford155

Nebulous2 wrote: »

.........but regardless of the headline figure, the users of 123 aren’t subsidising anyone, as the poster I was replying to claimed.

I think you misunderstood my post - I wasn't referring only to Santander.
ALL the banks have paid out massive amounts for PPI and other claims.
ALL the banks are dropping interest rates and raising overdraft rates.
Because they need to get their money back.
So ALL their customers are now worse off than before.
It's obvious really isn't it?

AndyPK

Hi

What period is the cashback calculated on ?

I was just wondering if I can move my Gas to 1st and Elec to 28th would I be able to split them across different months to maximize cashback?

Nebulous2

rufford155 wrote: »

I think you misunderstood my post - I wasn't referring only to Santander.
ALL the banks have paid out massive amounts for PPI and other claims.
ALL the banks are dropping interest rates and raising overdraft rates.
Because they need to get their money back.
So ALL their customers are now worse off than before.
It's obvious really isn't it?

Banks have taken a hit on PPI, which has hurt their profits, they’re also adjusting to the idea that a very low interest regime, far from being an aberration may be the new normal. It’s very hard to extrapolate how much any single factor has contributed to a tightening of perks.

What you said was:- “ 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.”

That’s clearly inaccurate when the banks are still giving many of us on here free money. We aren’t subsidising anyone. You could argue that the interest-paying customers are subsidising us. They are paying the banks interest and fees, which is then recycled to my cash back from my 123 lite. Those may well be the same people who previously paid and subsequently claimed back PPI.

Nebulous2

AndyPK wrote: »

Hi

What period is the cashback calculated on ?

I was just wondering if I can move my Gas to 1st and Elec to 28th would I be able to split them across different months to maximize cashback?

It’s a calendar month, paid at the end of the month. Those would both be in the same month in my view. Even if they weren’t and your 28th payment for electric rolled into the next month it would then hit the same month as the gas payment on the 1st in the next month.

Are you expecting to be over the £5 per month limit for utilities? Over £250 per month? I’m paying gas and electric for 2 houses and only hit £2.47 for 2% cash back last month.

surreysaver

AndyPK wrote: »

Hi

What period is the cashback calculated on ?

I was just wondering if I can move my Gas to 1st and Elec to 28th would I be able to split them across different months to maximize cashback?

Its a statement month.

surreysaver

Nebulous2 wrote: »

It’s a calendar month, paid at the end of the month. Those would both be in the same month in my view. Even if they weren’t and your 28th payment for electric rolled into the next month it would then hit the same month as the gas payment on the 1st in the next month.

Are you expecting to be over the £5 per month limit for utilities? Over £250 per month? I’m paying gas and electric for 2 houses and only hit £2.47 for 2% cash back last month.

Its a statement month, not a calendar month

AndyPK

I'm paying it quarterly, (it's much less painful than their DD estimates! (trying to keep them correct!)
and yes in winter I have got more than £5 cash back.

It's not worth going back to monthly just for the cash back, but if I could move the elec to a different month to the gas it would be worth while.

Nebulous2

AndyPK wrote: »

I'm paying it quarterly, (it's much less painful than their DD estimates! (trying to keep them correct!)
and yes in winter I have got more than £5 cash back.

It's not worth going back to monthly just for the cash back, but if I could move the elec to a different month to the gas it would be worth while.

I didn't think of that. Looks like it would be worthwhile then. I got it wrong with the dates, as my statement date is aligned to the calendar month. Look back your statements and see when cashback has been paid and your fee taken in the past.

Dw1985

I know it's not a current account but no one is offering any alternative options with better interest for larger amounts. So if you can lock your hard earned money away, try the atom app accounts.

12m fixed term @ 1.65%
Hope this helps