Santander to slash 123 account interest and shake up overdrafts

ColdIron

janbeno wrote: »

Quick point. Working out when to switch to Lite so I don't incur 2 charges. When's the best time to switch?

This shouldn't happen. I downgraded 08/10/2018, my last £5 was taken 12/09/2018 and the next £1 was taken 09/11/2018 so apparently a free month. The interest is paid pro rata to the date you switch so no problems there either. I think the statement date will change to the date you switch (or the day after?) so you might want to bear that in mind

bristleposh

It doesn’t seem to be worth changing to lite for me, I have two 123 accounts, one has over £20k in the other is around the £20k mark I have the requisite two payments going out of each and have to make sure I have over £500 going into each each month (not a problem). Does anyone know if I can improve my interest without tying up my money in savings accounts.

18cc

As finger Bob said the interest is 1.2% and even less if you pay tax on the interest because of course you pay tax on the interest but you cannot claim tax back on the £5 you spend. This means the effective interest is a tad over 1.1% if you pay 20% tax

molerat

We currently have one joint and one each. Plan is to move cashback paying DDs into joint, downgrade joint to lite and keep enough in to service it, move rest to Marcus and top up my currently idling BOS accounts, change individuals to everyday accounts moving just enough to pay the remaining DDs while we move them out and close the accounts. No real point opening any more accounts with the current state of interest. So just under £60K will be moved out over the next couple of months plus loss of £14 monthly fees. Multiple that by a few thousand customers .........

eskbanker

molerat wrote: »

So just under £60K will be moved out over the next couple of months plus loss of £14 monthly fees. Multiple that by a few thousand customers .........

They'll obviously have factored in a higher level of customer attrition into their modelling so it's not as if this will come as a surprise to them!

There's a precedent here in their late 2016 halving of the 123 interest from 3% to 1.5%, which temporarily increased the quarterly numbers of outbound CASS switches from 21/22K up to 26/28K over the next two quarters before reverting to 21/22K, so they'll hardly be distraught about losing 11,000 of their circa 7 million accounts (about 0.15%) if the same pattern is repeated. Obviously not everyone choosing to walk away would do so via a CASS switch but the point remains that there's a huge difference between noisy indignation on here and actual impact on a bank's performance....

schiff

18cc wrote: »

As finger Bob said the interest is 1.2% and even less if you pay tax on the interest because of course you pay tax on the interest but you cannot claim tax back on the £5 you spend. This means the effective interest is a tad over 1.1% if you pay 20% tax

There is a thought process enabling you to treat the Santander interest as being part of the exempt £1000, leaving the 5%s and 3%s to suffer the tax

Wikikenkey

bristleposh wrote: »

It doesn’t seem to be worth changing to lite for me, I have two 123 accounts, one has over £20k in the other is around the £20k mark I have the requisite two payments going out of each and have to make sure I have over £500 going into each each month (not a problem). Does anyone know if I can improve my interest without tying up my money in savings accounts.

I am the same as you bristlepost - Two 123 accounts - circa 20k in each (not sure where to go) I also need easy access. I am considering Marcus (maybe two accounts). Still not too sure. What have you decided?

brewerdave

molerat wrote: »

We currently have one joint and one each. Plan is to move cashback paying DDs into joint, downgrade joint to lite and keep enough in to service it, move rest to Marcus and top up my currently idling BOS accounts, change individuals to everyday accounts moving just enough to pay the remaining DDs while we move them out and close the accounts. No real point opening any more accounts with the current state of interest. So just under £60K will be moved out over the next couple of months plus loss of £14 monthly fees. Multiple that by a few thousand customers .........

Already moved/closed one of the sole accs. when the rate dropped from 3% - not sure exactly what I'm going to do with the remaining two accs. but one thing is for sure, they won't contain £20k after 1st May - I wonder which main stream bank (if any) is going to chase the £millions that will suddenly be looking for a new home??:(

castle96

"I am considering Marcus (maybe two accounts)."

CAN you have 2 accounts in ONE name ??

roddydogs

Lets face it, there's not that much anyone can do, and apparently the BOE is thinking of reducing BR.