Is it worth it?

whattochoose

Presently, I have a Santander 123 Current account. I'm mindful of the fact that on the 3rd August, the interest rate of this account will drop again to 0.60%, so definitely an incentive to move.
My preference would be to move to a similar easy access type of account. But my question is, is it worth it, since it seems to be such accounts offer rates of interest that are variable, and I'm guessing that these rates will only be heading one way over the coming months, perhaps making any switch I make something of a pointless exercise if interest offered heads down.
Advice appreciated.

bowlhead99

The account costs you a fiver a month and the interest on £10,000  at 0.6% is only £60 (£5 a month) before tax, so the 'is it worth it' question probably depends on how much cashback you earn from paying bills etc through the account. 

My preference would be to move to a similar easy access type of account. But my question is, is it worth it, since it seems to be such accounts offer rates of interest that are variable, and I'm guessing that these rates will only be heading one way over the coming months, perhaps making any switch I make something of a pointless exercise if interest offered heads down.

All current account providers offer interest rates that are 'variable' (after introductory offers) because you are not committing to leave your money with them for a fixed term (current accounts are instant access and you can withdraw as much money as you like, whenever you want), so on their side they are not going to commit to you to maintain the rate indefinitely.

Nationwide Flexdirect offers 2% AER interest on balances up to £1,500 for the first 12 months, and 0.25% AER (0.24% gross p.a) variable after that.  So whether you move from Santander or not,  you might like to make use of that account, albeit 2% on £1500 is only £30 and there is a minimum monthly pay-in requirement to keep earning that level of interest.

whattochoose

Thank you bowlhead for your detailed advice. I had been thinking about opening a Marcus account, but my tardiness means I am no longer able because the account is currently closed.
I may opt for the SAGA account, and hope interest on the account doesn't nosedive. I have about £15000 to invest. Ideally, I would like to have put the money in a fixed rate account, but may need immediate access to my funds.
Thanks again.

happy_hazelnuts

you could also consider ns&i at 1.15% 

badger09

whattochoose said:

Presently, I have a Santander 123 Current account. I'm mindful of the fact that on the 3rd August, the interest rate of this account will drop again to 0.60%, so definitely an incentive to move.
My preference would be to move to a similar easy access type of account. But my question is, is it worth it, since it seems to be such accounts offer rates of interest that are variable, and I'm guessing that these rates will only be heading one way over the coming months, perhaps making any switch I make something of a pointless exercise if interest offered heads down.
Advice appreciated.

In addition to other suggestions above, if you are generating cashback through DD payments, why not change your existing account to 123 Lite @ only £1 fee per month. You can do it online & retain the account number.

Also have a look at Virgin current account 2.02% but only on £1k balance, with no minimum pay in requirements