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Santander to slash 123 account interest and shake up overdrafts

edited 30 November -1 at 12:00AM in Budgeting & Bank Accounts
145 replies 8.7K views
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  • colstencolsten Forumite
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    Neil_Jones wrote: »
    I'm Lite, I'm staying where I am.

    The closest "clean" I suppose would be Nationwide after you've used the 5% Flexsaver option as that pays 1% as well but no cashback on it or monthly fees. But you can get the regular saver with it too so...
    How would Nationwide be even close? The FlexDirect pays 1% interest on up the £2,500, and no cashback. The 5% RS is dead but RS is irrelevant to the current account decision.
  • ColdIronColdIron Forumite
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    The nice thing about the full fat 123 was the high balance meant you didn't have to worry about DDs (utility and CC), regular saver SOs and monthly pay in SOs. But when they dropped to 1.5% I couldn't justify the cost after a while so downgraded to Lite and moved my cash to Marcus. Same cashback, same rate and saved £48. As belt and braces I set up an arranged overdraft on the Lite account but don't envisage having to use it

    To solve the DD/SO issues I moved £5k to Club Lloyds. I only have 3 regular savers I can be bothered with now, so £900 of SOs for them and a few hundred SO to Lite all on the first of the month. My CC DDs go out on the 7th/8th and it would be unusual for me to exceed £5k. I only have £1,500 pre-req monthly pay in accounts (2 * TSB and the Santander Lite) which handily satisfies Lloyds as well. These cross fire on the 21st so there is no bunching

    Now that Club Lloyds is an effective 1.2% on a full balance (coincidentally the same as the pre-drop 123 after the £5 fee) I'm getting 1.2% on £5k and 1.5% on £15k (for now). A lot better than the effective 0.7% on the new 123. I've been running this for nearly 2 years and it's nicely bedded in

    If you don't have very large regular saver outgoings and things are nicely spread out it might be worth looking at a Lite, Club Lloyds and Marcus (or similar) combination. Just an idea
  • Neil_JonesNeil_Jones Forumite
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    colsten wrote: »
    How would Nationwide be even close? The FlexDirect pays 1% interest on up the £2,500, and no cashback. The 5% RS is dead but RS is irrelevant to the current account decision.

    Closest "clean" interest rate. 1%. No fee, but no cashback.

    There is no other account on the market that I am aware of that does the Santander cashback model, the only other one was the Natwest Rewards, which they are changing from next month anyway, so this makes the Santander account unique once again.
  • schiffschiff Forumite
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    The fact that so many of us propose to stick with the account is revealing. It shows that a good interest rate, plus a maximum £20K balance (to earn the interest) and a cash-back scheme that was easy to make a modest profit from was very attractive. They will surely lose a number of accounts and retain the others but with a much lower maintained balance.

    I hope they have seen the sense in that.
  • edited 14 January 2020 at 2:58PM
    schiffschiff Forumite
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    edited 14 January 2020 at 2:58PM
    Has MSE - in the person of ColdIron - coined a new epithet in 'full fat 123'? :)
  • schiffschiff Forumite
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    There is something else - is their RS geared only to Select customers, not Lite customers?
  • fun4everyonefun4everyone Forumite
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    schiff wrote: »
    There is something else - is their RS geared only to Select customers, not Lite customers?

    I'm a lite customer and have the 123 regular saver.

    Not really surprised at this turn of events. I use Marcus/Regular Savers for my cash and 123 lite for bills. I only keep enough in the 123 lite to cover the outgoings each month and apart from TSB my balance in current accounts is neglible. I do have to move money manually out of Marcus once a month to cover the monthly round of firings into the Reg Savers/Pay in Requirements/Fund 123 lite to pay the bills but the set up works for me.

    Going forward not much will change in my personal set up although I hope for a current account with better cashback on bills to appear the chances of that actually happening seem slim.

    I also am reducing the amount of chasing Regular Savers I am doing and note that others ITT are doing the same. I did have 14+ a year ago. What else can we do with our money now but invest it? You either lose to inflation or take a risk in the current climate. I keep my emergency fund to an absolute bare minimum these days.
  • fworfwor Forumite
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    schiff wrote: »
    retain the others but with a much lower maintained balance.

    But that won't worry them, will it? Isn't the 1.5% pretty much a loss leader to Santander?

    It's annoying for me because it means I will have to find somewhere else to put £20k, and it means that the Lite account will then make more sense than "full-fat" - so I'll be another making the change to Lite in May.

    Like fun4everyone, I've given up on the various Regular Savers - too much faff IMO for too little gain.
  • ColdIronColdIron Forumite
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    schiff wrote: »
    There is something else - is their RS geared only to Select customers, not Lite customers?
    The RS is available to 1|2|3 World account holders
    https://www.santander.co.uk/personal/savings-and-investments/savings/regular-esaver

    The 1|2|3 Lite Current Account is part of 1|2|3 World
    https://www.santander.co.uk/personal/123-world
  • schiffschiff Forumite
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    I'm a lite customer and have the 123 regular saver. TY

    I also am reducing the amount of chasing Regular Savers I am doing and note that others ITT are doing the same. I did have 14+ a year ago. What else can we do with our money now but invest it? You either lose to inflation or take a risk in the current climate. I keep my emergency fund to an absolute bare minimum these days.

    I'm starting to look at 2% RSs now in view of this. The normal commitment to RSs usually means being tied in to £X per month for usually 12 months or more and that has tended to put me off going for the lesser rate. But I've done a run through of the 2% that I haven't got and I find they have a lot in their favour - a fixed rate (some of them), being able to open and service online, no obligation to subscribe every month and the unlimited facility to make withdrawals!

    That makes them very interesting following today's news!
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