Santander 123 - Back to Being Worth it?

RG2015

WillPS said:

RG2015 said:

WillPS said:

RG2015 said:

anotheruser said:

So people use savings accounts as current accounts?

I think the full fat 123 would have netted us about £60 for the year, the lite was perhaps a little less but I lothe paying for a bank account.  Banks started charging, people paid, so they carry that on, while not giving decent interest rates, depsite what the bank of England are doing.

Just feeling like Lloyds isn't that great any more, especially as the free magazine has very limited options (all other options are useless for us).

You loathe paying for a bank account. Why?

It has always fascinated me that people feel entitled to free banking.

Banks provide a high quality service. It actually costs money to run a bank account so someone has to pay for it. Presumably those that pay for loans, overdrafts and mortgages subsidise those of use who enjoy free banking.

I am happy to get a world class banking service for free. But I never take it for granted

It's a Money Saving forum. Clue's in the title.

And people are entitled to fee free (basic) banking in the UK, subject to acceptance criteria.

Yes, the entitlement to fee free basic banking is a good thing for those on low incomes. However, there is no reason why everyone should be entitled to free banking regardless of income or wealth.

They are though. The reason people feel entitled to it is, in part, because they are.

Why should a millionaire feel entitled to free banking?

RG2015

B0bbyEwing said:

RG2015 said:

People who enjoy free banking, including myself, should be aware that other individuals are paying for it.

Why "should" they?

I'll tell you here & now, I don't care & I'm quite sure I'm not alone. Maybe I might be on this forum but in the outside world I can 100% guarantee you I'm not alone & am probably in the majority, not minority - I don't care who is paying for it. At the end of the day I want free banking or profitable banking (even if you have to pay a bit to get a bit more back). So long as that's available then I'm taking it.

The day it ends and we all have to make a net loss for banking, I'll be doing it the cheapest way possible. 

I admire your honesty.

Someone else, possibly worse off than you, is paying for you to get an excellent banking service free of charge.

And you appear to see no reason to acknowledge this fact.

B0bbyEwing

RG2015 said:
Why should a millionaire feel entitled to free banking?

Because it's an available option until it's no longer an available option.

RG2015

B0bbyEwing said:

RG2015 said:
Why should a millionaire feel entitled to free banking?

Because it's an available option until it's no longer an available option.

Just because something is available does not make it an entitlement.

entitled

adjective

1. believing oneself to be inherently deserving of privileges or special treatment.
   
   

anotheruser

RG2015 said:

anotheruser said:

So people use savings accounts as current accounts?

I think the full fat 123 would have netted us about £60 for the year, the lite was perhaps a little less but I lothe paying for a bank account.  Banks started charging, people paid, so they carry that on, while not giving decent interest rates, depsite what the bank of England are doing.

Just feeling like Lloyds isn't that great any more, especially as the free magazine has very limited options (all other options are useless for us).

You loathe paying for a bank account. Why?

It has always fascinated me that people feel entitled to free banking.

Banks provide a high quality service. It actually costs money to run a bank account so someone has to pay for it. Presumably those that pay for loans, overdrafts and mortgages subsidise those of use who enjoy free banking.

20 years ago, nearly every bank account was free.
I find it facinating that people are very forgetful.

This new "we're gonna charge you" is still a relatively new thing (and hasn't really taken off in a big way).  A lot of the "enhancements" the banks charge for are for things that are useless for many - free world wide travel insurance, phone insurance, breakdown cover, sitting down insurance...  all things that most people probably wouldn't bother (or can find cheaper elsewhere).  They're also relatively low cost for the bank as most people won't use any or many of those services.

Yet paying interest on balances?
Nah - the bank actually giving you on-going money rewards is fairly rare (yes, I am aware of Halifax's £5 a month, but I'm specifically talking about interest on balances).

They also gain huge amounts of profit from the funds we put in there, as well as charging huge amounts for mortgages, people who pay interest on credit cards (yes, I should think there are still some).

You'll struggle to live without a bank, so if I am required to have one (which let's face it, you pretty much need one to live a hassle-free life), then why should I pay for it?
That's not being entitled, but realistic and remembeirng how banking was free many years ago and it appears as some people are happy to pay, they'll keep doing it.

Also, you keep referencing this... "world class" ... "excellent banking service"...
I wouldn't call our banking "world class" in any way.  It does nothing to amaze me or make me grateful for it, nor do I feel like my business is being rewarded for using them.  A token magazine once a month on a subject I'm not entirely interested in or a free £5 is hardly a reward.
How much money do they make from my money being in their care?  If they gave me even 50% of this back, I'd be more likely to see the bank as "excellent" but for now, pretty much all of them are just "standard"... nothing that remarkable about them.

And lastly, you may continue to latch on to thinking people think they are entitled to free banking...  in this modern world, the lines are blurred as I turn on the tap and water comes out - I feel no sense of joy or thankfulness that clean water comes out of my taps.  It does, it's modern life in this country.  That's not entitlement-thinking but perhaps taking something for granted.  It's not part of our world to turn on the tap and nothing comes out, therefore it's of no concern to me.  If there was doubt it would or water came out 50% of the time, I would feel joy or thankfulness but until that time, it's something I expect and in today's modern world, people expect a lot more than no water from the taps.

anotheruser

And getting back to the topic...

What makes the Santander 123 Lite better than the full fat 123 account?

If you have an average of £5000 in that account, surely the interest on that outweighs the fee?

Daliah

B0bbyEwing said:

Daliah said:

Point is, though, that the Santander 123 is unique in that it pays cashback on DDs, and many people can make a net profit from the 123 Lite. There is no ‘same thing’ you would get for free elsewhere. 

Technically speaking you're paying, yes, but I'm sure you get the point. It's not like Halifax Ultimate Reward current account which has a hefty monthly price tag.

The 123 is not comparable to the Halifax Ultimate Reward. Whilst they are both current accounts, they are offering completely different perks. For many people, the HUR is a perfectly good choice as it is one of the top packaged account, competing with the Nationwide FlexPlus and the Virgin Money Club M. Many people choose one of these for some of their insurance needs as they are better value than paying for individual insurances. 

RG2015

anotheruser said:

And getting back to the topic...

What makes the Santander 123 Lite better than the full fat 123 account?

If you have an average of £5000 in that account, surely the interest on that outweighs the fee?

The fee for the 123 is £4 per month compared with £2 per month for the lite.

Yes, it pays for the fee but £20k in an easy access savings account would earn at least £13 more per month. This becomes £15 more per month when you include the extra £2.

anotheruser

RG2015 said:

anotheruser said:

And getting back to the topic...

What makes the Santander 123 Lite better than the full fat 123 account?

If you have an average of £5000 in that account, surely the interest on that outweighs the fee?

The fee for the 123 is £4 per month compared with £2 per month for the lite.

Yes, it pays for the fee but £20k in an easy access savings account would earn at least £13 more per month. This becomes £15 more per month when you include the extra £2.

And as I asked before...  people are using savings accounts as current accounts?
Or do they just mess about trnasferring money every 5 minutes...  using faster payments?  A relatively new thing for banking?  And do these people feel entitled / take for granted the faster payments system?

That sounds like a lot of hassle for me.

Perhaps stick to the same £5000 I suggested and run your math again - then the interest is a lot lower and thus the hassle rate changes.
Then for the smaller interest amount, if people are happy to stash their money in a bank that isn't particuarly well known (at all!), risk having to mess about with the FCFS or whatever it is, AND are happy to keep transferring money out of it to cover the shopping, good on those people.  If these weird banks can provide a high interest rate on balances, why can't the usual banks?

Plus, you didn't particularly answer the question.
Many people in this thread note the 123 lite, which suggests they do not have a huge amount of money in their current accounts, otherwise, like I suggested, surely the FF 123 account would become worth it (so long as they aren't into transferring money here there and everywhere... IE, in these easy access savings accounts).

And if these easy access savings accounts are so great - why aren't they recommended on here?  I saw none from the rankings website quoted earlier advertised on this site as being "ground-breaking".  Why is that?

Daliah

RG2015 said:

The point I am making is there is no such thing as free banking.

People who enjoy free banking, including myself, should be aware that other individuals are paying for it.

I agree there is no free banking but I am not totally convinced that it is only others who pay for my free banking. I am paying, too, and so I reckon do you, in the form of foregone interest.

Retail banks are making their money predominantly from lending (mortgages, loans, overdrafts, credit cards) but also from paying rather low interest rates on positive balances. So unless I am micro-managing my current account, I always have some money in there for which I get £0 interest. I am pretty sure there are many others in similar situations.

If we assume that half of the 49 million people who hold a current account in the UK have an average of £1,000 in their current account for half of the year, that would be nearly £25 billion the banks have interest free for half the year. At 2% AER, that would be £2.5 billion of interest people forego, in return for getting free banking services.