Santander 1/2/3 Account down to 0.60% from 3 August 2020

bristolleedsfan

https://www.santander.co.uk/personal/current-accounts/123-current-account

Notepad_Phil

Hmmmm, I might need to reconsider my 123 account if the other higher interest bank accounts don't also reduce their interest rates.

The only reason I've been keeping it is that my cashback meets the monthly fee and it's not too far away from the likes of Lloyds and BOS and you can get that interest on £20k - which is very handy when you want the ability to seed the account with a big chunk of cash and then let it pay out all the regular savers (into double figures) for multiple months without the need to constantly add new money in. 

Ah well, I've got till the 3rd August to make the decision in.

MACKEM99

Race to the bottom.

jim1999

I'm really struggling to see how they can justify the £5 fee.

For £1 you get the cashback anyway, so effectively the choice is whether to pay an extra £4 per month / £48 per year for 0.6% interest.

If you maintain a balance of £8k, that means you break even.

If you maintain the maximum balance of £20k, you'll have £72 profit, for an effective interest rate of 0.36%.

Realistically, how many people is this product now appropriate for?  Basically people who are going to keep £8k-20k in their account on average, who have such wildly flexing balances that they're unable to commit the balance in excess of £8k to a different savings account.

colsten

jim1999 said:

I'm really struggling to see how they can justify the £5 fee.

You have plenty of other options, either with Santander, or with other banks. It's very easy to change. 

digalumps

Egg money - those were the days...

Mind you I still have my Egg now Barclaycard 0.5% cashback card i keep expecting them to reduce the rate but they don't.

Fingerbobs

digalumps said:

Egg money - those were the days...

Mind you I still have my Egg now Barclaycard 0.5% cashback card i keep expecting them to reduce the rate but they don't.

Shhhh! 

jim1999

colsten said:

jim1999 said:

I'm really struggling to see how they can justify the £5 fee.

You have plenty of other options, either with Santander, or with other banks. It's very easy to change. 

Well obviously, yes.  But that doesn't change the question, which is why they're still offering a product that's suitable for almost nobody.

realaledrinker

Cuz most account holders won't notice or can't be bothered.  Inertia.

dgp1000

It is still an interest paying CURRENT account. You need to remember some of these high interest instant access accounts do not transfer the money the same day, so you need to be really well organised to make sure you have enough money in your current account to pay your bills.

AnotherJoe

Damn, I'll have to go with the faff of moving two accounts now.