Santander now rubbish - but who to switch too??

ZeroSum

colsten said:

ZeroSum said:

They're paying rubbish rates & have for years once you factor in the additional £48 a year over & above the lite version which offers same cashback.

It's generally always been better to keep minimum in lite & savings elsewhere

I agree that the rate on the full fat 123 is now pants but until quite recently the account has been superb, for many years, for instant access savings. 123 Lite is the name of the game now for those who still get cashback. Anyone not getting any, or very little, cashback for some reason might as well completely switch to somewhere like Club Lloyds or Virgin.

It was OK for convenience , but not superb

colsten

It was superb enough for some people to keep £80k, spread over 4 x  full fat 123 accounts, for at least 6 years from when the account became available in 2012. Obviously, for much smaller sums there were one or two other accounts which paid better interest rates at times, and it's fair to assume that those who had lots of money in Santander would also have exploited those better rates to the full. Anyway, all water under the bridge now.

ZeroSum

colsten said:

It was superb enough for some people to keep £80k, spread over 4 x  full fat 123 accounts, for at least 6 years from when the account became available in 2012. Obviously, for much smaller sums there were one or two other accounts which paid better interest rates at times, and it's fair to assume that those who had lots of money in Santander would also have exploited those better rates to the full. Anyway, all water under the bridge now.

It wasnt 'superb' for those at all. 
We've had a few of them on here who genuinely struggled to understand the whole issue that the fee eats into the return. 

A single account with £20k in was okish for convenience. More than one account was just pointless & actually costing you more money. It was ignorance more than anything. 

colsten

It wasn’t at all as you portray it, but as I said, water under the bridge now. 

inspectorperez

ZeroSum said:

colsten said:

It was superb enough for some people to keep £80k, spread over 4 x  full fat 123 accounts, for at least 6 years from when the account became available in 2012. Obviously, for much smaller sums there were one or two other accounts which paid better interest rates at times, and it's fair to assume that those who had lots of money in Santander would also have exploited those better rates to the full. Anyway, all water under the bridge now.

It wasnt 'superb' for those at all. 
We've had a few of them on here who genuinely struggled to understand the whole issue that the fee eats into the return. 

A single account with £20k in was okish for convenience. More than one account was just pointless & actually costing you more money. It was ignorance more than anything. 

I must have missed something in the logic here. £80,000 spread over 4 accounts paying 3% equates to £2,400 p.a. interest. Bank charges will be £240 (4 x £60), which when deducted from the annual interest provides a net return of 2.7% (£2,160) according to my calculations. I had always thought, and still do, that Santander 123 was a leading product on that basis plus the additional cashback on direct debits and the other rewards which Santander offered from time to time. My family saved quite a bit of money over the years for instance at their favourite restaurant Miller & Carter by paying on Santander card. Like many others on this thread, I have now downgraded to 123 Lite and moved surplus monies to better interest paying accounts.

colsten

exactly. Even after subtracting the monthly fee, the full-fat 123 paid more interest than just about all other accounts (ignoring the likes of FlexDirect etc, which came with low balance limits)

OldBeanz

ZeroSum said:

colsten said:

It was superb enough for some people to keep £80k, spread over 4 x  full fat 123 accounts, for at least 6 years from when the account became available in 2012. Obviously, for much smaller sums there were one or two other accounts which paid better interest rates at times, and it's fair to assume that those who had lots of money in Santander would also have exploited those better rates to the full. Anyway, all water under the bridge now.

It wasnt 'superb' for those at all. 
We've had a few of them on here who genuinely struggled to understand the whole issue that the fee eats into the return. 

A single account with £20k in was okish for convenience. More than one account was just pointless & actually costing you more money. It was ignorance more than anything. 

It was brilliant for me. I had a flexi mortgage at £100k and they were paying 3% for £80k while charging me less than 1% plus another £10 per month for paying in and taking out (most of) £1k to my mortgage. Other £20k in PBs which paid out 8 out of 12 months. £2k pa, risk free, with their money. Mortgage free was not a wannabe. Happy days.

hubb

ZeroSum said:

hubb said:

ZeroSum said:

hubb said:

I have come late to this party but I also have a 123 savings account and paying £5 a month with about 17K saved so far. Do I switch it to a lite now or wait till the rates drop in August ?

Should have done it years ago tbh

But they ares till paying some interest till August, and I am getting cashback on Mortgage, Utility and other bills..

They're paying rubbish rates & have for years once you factor in the additional £48 a year over & above the lite version which offers same cashback.

It's generally always been better to keep minimum in lite & savings elsewhere

But I am still earning around £21 in interest (as of this month) and cashback for a £5 fee so what would be the point of jacking it in before the rate drops  in August ?

colsten

hubb said:

But I am still earning around £21 in interest (as of this month) and cashback for a £5 fee so what would be the point of jacking it in before the rate drops  in August ?

You'll only get ~£17 max interest from now until it drops even further in August. Minus your £5 charge, that leaves you with £12 max. You can ignore the cashback in the calculations as you can get the same cashback in a 123 Lite. So rather than 1%, your effective interest rate in the full-fat 123 is now 0.71% at best, and less if you don't maintain a £20k balance.

There are many accounts that pay a lot more than that, starting with Club Lloyds or BoS Vantage which yield 1.2% if your balance is maintained at £5k. Even keeping a £5k float in a 123 Lite and the rest in a 1.05% instant access savings account pays you more than your treasured full-fat 123. I know from experience that it's hard to give it up and you might not want to do it for a few quid each month, but if you do keep it, don't kid yourself that it's a good account now. It isn't.

hubb

colsten said:

hubb said:

But I am still earning around £21 in interest (as of this month) and cashback for a £5 fee so what would be the point of jacking it in before the rate drops  in August ?

You'll only get ~£17 max interest from now until it drops even further in August. Minus your £5 charge, that leaves you with £12 max. You can ignore the cashback in the calculations as you can get the same cashback in a 123 Lite. So rather than 1%, your effective interest rate in the full-fat 123 is now 0.71% at best, and less if you don't maintain a £20k balance.

There are many accounts that pay a lot more than that, starting with Club Lloyds or BoS Vantage which yield 1.2% if your balance is maintained at £5k. Even keeping a £5k float in a 123 Lite and the rest in a 1.05% instant access savings account pays you more than your treasured full-fat 123. I know from experience that it's hard to give it up and you might not want to do it for a few quid each month, but if you do keep it, don't kid yourself that it's a good account now. It isn't.

So like I said, its best to leave it earning until the rate really drops.