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Santander to slash 123 account interest and shake up overdrafts

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  • fun4everyone
    fun4everyone Posts: 2,366 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 14 January 2020 at 4:27PM
    schiff wrote: »
    I'm starting to look at 2% RSs now in view of this.

    Yes....agreed. I have some myself, and it does mean cash in them is keeping pace with inflation. However I am most definitely not chasing them like I did with Virgin Branch 3%s for example.

    When I had loads of 5%/4%/3% regular savers I held quite a bit more "emergency fund" cash than I do now.
  • schiff
    schiff Posts: 20,242 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    fwor wrote: »
    But that won't worry them, will it? Isn't the 1.5% pretty much a loss leader to Santander?

    It may. Will the saving they make on the interest rate reduction equal the loss that will probably happen in the reduction of deposited funds?
  • fun4everyone
    fun4everyone Posts: 2,366 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper Photogenic
    Modern retail banking (from what I have read) does not have even a moderate reliance on customers depositing funds. Apologies but I cannot cite specific regulations or lack of regulations because I am just going off memory.
  • Cmdr_Bond
    Cmdr_Bond Posts: 628 Forumite
    Part of the Furniture 500 Posts Name Dropper
    ColdIron wrote: »
    Even less reason to keep the full fat 123 now
    • At the moment, the 123 account pays 1.5% AER on balances up to £20,000, as well as up to 3% cashback on selected household bills, for a £5 fee.
    • But the bank's now revealed that from 5 May 2020, it will be cutting its savings rate to 1% AER and capping its cashback at £5 per month in each of its cashback categories, for new and existing customers. The £5 monthly fee will remain the same.
    https://www.moneysavingexpert.com/news/2020/01/santander-to-slash-savings-rates-and-shake-up-overdrafts---what-/

    They're also changing their overdraft and some other fees...

    I know, I've just upgraded! Might change to Lite in May

    Before 6th April 2020

    Arranged overdraft

    < £2,000.00 = £1.00/day fee
    £2,000.00 - £2,999.99 = £2.00/day fee
    £3,000+ = £3.00/day fee

    From 6th April 2020

    39.9% APR/AER (variable)

    Additionally, from 5th May 2020, both the foreign currency conversion fee for cash withdrawals in a foreign currency, and the foreign currency purchase few for a debit card payment in a foreign currency rise from 2.75% to 2.95% of the total transaction value.
    Not as green as I am cabbage looking
  • schiff
    schiff Posts: 20,242 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Whenever I see these horrendous overdraft interest rates, I can't help but feel heartfelt sympathy for those trapped in such a situation.

    It certainly puts my fretting over a half per cent rate cut into perspective.
  • Cmdr_Bond
    Cmdr_Bond Posts: 628 Forumite
    Part of the Furniture 500 Posts Name Dropper
    And it's more than the fees would've been on the max....

    £3/day for 365 days = £1,095
    £3,000 × 39.9% = £1,197 and more if its higher
    Not as green as I am cabbage looking
  • harz99
    harz99 Posts: 3,705 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Home Insurance Hacker!
    Back to Lite for us in May, balance over 2k to Marcus. Like others here I can't be bothered chasing regular savers now, and as we have exhausted all the switch bonuses we don't need loads of DDs or SOs so life is becoming easier.
  • where_are_we
    where_are_we Posts: 1,210 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Bob will be singing "A Hard Rain`s A-Gonna Fall" tonight as I cook the dinner! We have been with Santander since the Girobank days. 123 is our main hub current account and we have too many standing orders going out to regular savers at the beginning of the month as well as many direct debits, to warrant a change. Keeping more money in Marcus would mitigate the interest rate loss but Marcus does not do standing orders, so we would need to manually transfer a large sum at the end of each month to 123 to cover the money leaving for the regular savers.We would be uneasy this.
  • YBR
    YBR Posts: 698 Forumite
    Seventh Anniversary 500 Posts Mortgage-free Glee! Name Dropper
    Like many others, our full-fat 123 is still a relatively good deal.
    I'm not interested in chasing switching bonus, just a good-enough long term rate.

    With the current account (still likely to yield £20pm in cash-back and interest) we have 2x regular savers at 3%, plus mini123 for each kid in 3% territory.
    Decluttering awards 2025: 🏅🏅⭐️ ⭐️, DH: ⭐️ and one for Mum: 🏅






  • colsten
    colsten Posts: 17,597 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    Neil_Jones wrote: »
    Closest "clean" interest rate. 1%. No fee, but no cashback.
    Well that is not quite true. Lloyds and BoS pay the same on up to £4K, and more if you have another K to park in the account. LLoyds fee is easily avoidable, and BOS has no fee. There's also still the 3% TSB though that might only last a short while longer, and interest gets only paid on up to £1,500.
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