Santander to slash 123 account interest and shake up overdrafts

surreysaver

Funny how they're making the change on a Tuesday. Why not the Monday?

Fingerbobs

ColdIron wrote: »

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

Just to clarify, the Santander "effective" interest rate after taking the £5 fee, but not cashback, into consideration is 1.2% only if you maintain a balance of exactly £20,000 in the account. The lower the balance, the lower the "effective" interest rate. A balance of £4,000 effectively earns zero interest, and anything less it'll be costing you money (ignoring cashback).

People throw this 1.2% figure around a lot, but it's not correct in practice.

colsten

Fingerbobs wrote: »

Just to clarify, the Santander "effective" interest rate after taking the £5 fee, but not cashback, into consideration is 1.2% only if you maintain a balance of exactly £20,000 in the account. The lower the balance, the lower the "effective" interest rate. A balance of £4,000 effectively earns zero interest, and anything less it'll be costing you money (ignoring cashback).

People throw this 1.2% figure around a lot, but it's not correct in practice.

It's 1.5% for me, regardless of how much I have in the account, as my cashback always reliably pays the account fee. Yes, I know I would get the same amount of cashback for £4/mth less but then I'd get 0% interest on some fairly large amounts and/or would have to manually refill several times a month, and still I'd be at permanent risk of going overdrawn, particularly when the monthly credit card bills hit. With the new overdraft charges, avoiding overdrafts becomes even more important to me. I'll continue to use the full-fat 123 when they drop the rate, albeit with a permanently reduced max balance.

ffacoffipawb

surreysaver wrote: »

Funny how they're making the change on a Tuesday. Why not the Monday?

Because they thought Monday 4th May was a bank holiday. It should be one, but the bank holiday has been moved to Friday 8th May.

Cmdr_Bond

YBR wrote: »

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.

Careful on the cash back, this is what's in the small print

5.2_Cashback_amount_and_categories wrote:

Cash back is a monthly cash reward that we'll pay directly into your 1|2|3 Current Account, as long as you meet the ongoing eligibility criteria that we've set out in Conditions 4 and 5.

From 5 May 2020, a cap of £5 will apply on the amount of cashback that is paid on each of the eligible percentage cash back categories. This means that you can earn up to £15 in cashback in any one month. Depending on your statement date this may mean that cashback is capped on Direct Debits which you've paid in April 2020.

Payments for financial or additional services (such as servicing and maintenance arrangements, or warranties) from organisations in eligible cashback categories won't qualify for cashback.

You can only earn cashback on eligible Direct Debit payments for your home in the UK as long as it's only for your comestic use Direct Debit payments for commercial purposes don't qualify for cash back. The cash back is calculated and given by us (Santander UK plc) and not the organisation that receives the Direct Debit payment. This cashback doesn't affect any other offers that these organisations may supply.

Cashback is paid at the end of each statement period, based on the date your Direct Debits are collected by the company you are paying.

We'll oniy pay cashback on the net amount of the Direct Debit payment. For example, if you're refunded or part-refunded your Direct Debit payment, we'll pay cash back on the net amount that you actually paid to the organisation.

You'll need to ensure that Direct Debits are active on your account when we calculate your cashback. We'll credit the total amount of cashback you earn in each statement period to your account. Cashback is based on the date in which Direct Debits are collected. For reasons outside of our control, Direct Debits collection dates may vary which means, at times, a Direct Debit may not be collected withn a statement period. This may have an impact on your ability to earn cashback for that month due to this being capped in the following month. You can check your statement or visit Online Banking to find out which date we pay your cashback and can consider changing your statement date, or the date the company collects your Direct Debit to minimise the risk of this happening.

MDMD

I wonder what the likelihood is of them doing another switch offer next year if a load of people close their accounts in May?

I’m running low on Amazon credit.....

soulsaver

MDMD wrote: »

I wonder what the likelihood is of them doing another switch offer next year if a load of people close their accounts in May?

I’m running low on Amazon credit.....

Maybe this is because of the bonanza switch cost?

johnoz

You folks who have mentioned moving from “full-fat” 123 to 123-Lite (and vice versa) ... have you found an “automatic” way to do this (like the Current Account Switching Service) or did you need to do everything manually as both accounts are at the same bank? Thanks in advance.

soulsaver

johnoz wrote: »

You folks who have mentioned moving from “full-fat” 123 to 123-Lite (and vice versa) ... have you found an “automatic” way to do this (like the Current Account Switching Service) or did you need to do everything manually as both accounts are at the same bank? Thanks in advance.

It's the same account, same sort code & ac number, just downgraded. No need to move anything.

schiff

soulsaver wrote: »

It's the same account, same sort code & ac number, just downgraded. No need to move anything.

I suppose you could request it via secure message?