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

digalumps

you pay 12 x £5 ie £60 fees.

if you have no cashback you need £10k in the account to generate £60 interest at 0.6% ie to break even (assuming no tax liability)

Thus 10k will give you an effective interest rate of zero.

eskbanker

In any given 123 account, you'll need to have £10K earning 0.6% to offset the £60 annual charge, ignoring cashback.

badger09

vigman said:

Sorry to sound so needy but I am really very unwell currently (not Covid) and my eyesight is extremely poor from AMD so scrolling through all the threads on this is really difficult..
My wife and I have a Santander 123 account each and a joint account all maintaining £20K balances with the appropriate feed ins and outs and Direct Debits.
With the move to 0.6% interest in August, please could someone do the figures to show when this is breaking even, and if/when it would actually cost us to maintain the accounts, please. Assume no cashback (although in reality there is some)
Many thanks in advance

You don't sound needy and I hope you feel better soon.

There comes a time when chasing the best rates is simply not worth it. My advice, is to make your life simpler & cut out some stress.

It sounds as though you've had £60k cash sitting in 3 Santander accounts for some time. You don't seem to need immediate access to all that cash, so consider something like:

'Upgrade' one of the Santander accounts to 'Lite'. Get all the cashback paying DDs into that one. Leave a big enough balance to cover a month's DDs (or enough for a couple of months) and continue to fund it with £500 pm. If your DDs are more than £500 pm, fund it with more than £500.

Switch the other 2 accounts (to ensure any random payments in are forwarded).

Transfer the bulk of the rest to a 1 year fixed rate account, and whatever amount you're comfortable with, to an instant access account. Marcus will still be paying 1.25% (IIRC) though obviously that could change. OR for a really easy solution, transfer the lot to Marcus (other accounts are available) or to NS&I.

There will inevitably be ways of generating more interest, but to be honest, in your position I'd probably go for the easier option.  

colsten

badger09 said:

Transfer the bulk of the rest to a 1 year fixed rate account, and whatever amount you're comfortable with, to an instant access account. Marcus will still be paying 1.25% (IIRC) though obviously that could change. OR for a really easy solution, transfer the lot to Marcus (other accounts are available) or to NS&I.

Marcus don't take new customers for their fixed rate account, and the instant access one is now down to 1.05%.

moneyfacts.co.uk has a complete list of savings accounts. The rates seem to go down daily though, so what you see today might not be there tomorrow....

ratechaser

badger09 said:

vigman said:

Sorry to sound so needy but I am really very unwell currently (not Covid) and my eyesight is extremely poor from AMD so scrolling through all the threads on this is really difficult..
My wife and I have a Santander 123 account each and a joint account all maintaining £20K balances with the appropriate feed ins and outs and Direct Debits.
With the move to 0.6% interest in August, please could someone do the figures to show when this is breaking even, and if/when it would actually cost us to maintain the accounts, please. Assume no cashback (although in reality there is some)
Many thanks in advance

You don't sound needy and I hope you feel better soon.

There comes a time when chasing the best rates is simply not worth it. My advice, is to make your life simpler & cut out some stress.

It sounds as though you've had £60k cash sitting in 3 Santander accounts for some time. You don't seem to need immediate access to all that cash, so consider something like:

'Upgrade' one of the Santander accounts to 'Lite'. Get all the cashback paying DDs into that one. Leave a big enough balance to cover a month's DDs (or enough for a couple of months) and continue to fund it with £500 pm. If your DDs are more than £500 pm, fund it with more than £500.

Switch the other 2 accounts (to ensure any random payments in are forwarded).

Transfer the bulk of the rest to a 1 year fixed rate account, and whatever amount you're comfortable with, to an instant access account. Marcus will still be paying 1.25% (IIRC) though obviously that could change. OR for a really easy solution, transfer the lot to Marcus (other accounts are available) or to NS&I.

There will inevitably be ways of generating more interest, but to be honest, in your position I'd probably go for the easier option.  

I'll get my coat 

vigman

Thanks, everyone. Through pain and a morphine fog I couldn't even work out that simple break even point!
These days the incredibly low savings interest rates of any type hardly make the bother of ditching and switching worthwhile
I wish I'd taken my own advice and bought more sovereigns when they were £160 each. I recently choked at seeing them sell for £312 each only to see them continue up to their current £360 each......!
Given inflation and the economic downturn to come, with these saving rates we are all losing in real terms anyway.
I imagine that in a few years time there will be a climb for brave mixed equity investors, as there was after 2008, but I just can't risk the sort of money needed to make any real difference.
Thanks again
Vigman

badger09

ratechaser said:

badger09 said:

vigman said:

Sorry to sound so needy but I am really very unwell currently (not Covid) and my eyesight is extremely poor from AMD so scrolling through all the threads on this is really difficult..
My wife and I have a Santander 123 account each and a joint account all maintaining £20K balances with the appropriate feed ins and outs and Direct Debits.
With the move to 0.6% interest in August, please could someone do the figures to show when this is breaking even, and if/when it would actually cost us to maintain the accounts, please. Assume no cashback (although in reality there is some)
Many thanks in advance

You don't sound needy and I hope you feel better soon.

There comes a time when chasing the best rates is simply not worth it. My advice, is to make your life simpler & cut out some stress.

It sounds as though you've had £60k cash sitting in 3 Santander accounts for some time. You don't seem to need immediate access to all that cash, so consider something like:

'Upgrade' one of the Santander accounts to 'Lite'. Get all the cashback paying DDs into that one. Leave a big enough balance to cover a month's DDs (or enough for a couple of months) and continue to fund it with £500 pm. If your DDs are more than £500 pm, fund it with more than £500.

Switch the other 2 accounts (to ensure any random payments in are forwarded).

Transfer the bulk of the rest to a 1 year fixed rate account, and whatever amount you're comfortable with, to an instant access account. Marcus will still be paying 1.25% (IIRC) though obviously that could change. OR for a really easy solution, transfer the lot to Marcus (other accounts are available) or to NS&I.

There will inevitably be ways of generating more interest, but to be honest, in your position I'd probably go for the easier option.  

I'll get my coat 

No need for you to get your coat. You're not in same circumstances as vigman. I stand by the sentence you have put in bold

Hammer_Time

Their Esaver has now gone down to 0.1% from 0.5%. Just a head up if you use it along side their Lite account.

where_are_we

We have just changed our joint 123 to joint 123 Lite. One account holder can do this online. Easy, quick, and efficient. Was slightly concerned that confirmation email was addressed only to the one account holder initiating the process and none to the other account holder. However my fears of a new single 123 lite were allayed after both of us logging in and seeing the new joint 123 Lite. If your 123 £5 fee date is imminent make sure to change before this date! You will avoid paying another £5 and the new £1 fee won`t be taken for one month on your new anniversary opening date.

hollie.weimeraner

eskbanker said:

In any given 123 account, you'll need to have £10K earning 0.6% to offset the £60 annual charge, ignoring cashback.

So if I leave 20k in the account I earn £120 plus my cashback - the £60 fees. If I downgrade to the light I just get my fees -£12.  As my cashback is £4-50 a month I'll earn less than leaving my 123 as it is.  It's not great but unless I can get more anywhere else I'm still better off with Santander unfortunately.  (I still have my TSB accounts as well)