Santander 123 - Back to Being Worth it?

WillPS

RG2015 said:

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?

Because they are entitled to free banking. Presumably they'd be doing themselves a considerable disservice by taking it.

B0bbyEwing

Daliah said:

But as with everything - you are free to do what you like with your cash. 

Although some may tell you otherwise.

WillPS said:

Because they are entitled to free banking. 

Honestly, you don't want to go down that road. 




Just to edit this post - the image is saying Daliah is correct in how I quoted them. Nail on head is the phrase.
What I wasn't saying is Daliah or anyone else needs a nail hammering in to their head.

Just putting it out there before anyone goes & gets offended by something that wasn't said

phillw

RG2015 said:
Definitely. I have all three, NatWest and RBS Reward and Santander 123 lite. Four if you include my NatWest joint reward account.

Could actually do an RBS joint reward as well plus sole accounts for Mrs RG2015, but she thinks I am insane as it is.

Do you have three halifax reward accounts?

RG2015

phillw said:

RG2015 said:
Definitely. I have all three, NatWest and RBS Reward and Santander 123 lite. Four if you include my NatWest joint reward account.

Could actually do an RBS joint reward as well plus sole accounts for Mrs RG2015, but she thinks I am insane as it is.

Do you have three halifax reward accounts?

The NatWest group reward accounts only require direct debits and logging in once a month. Hence pretty much money for nothing.

The Halifax reward account requires either holding a balance of £5k or debit card transactions to the tune of £500 per month.

I wouldn't do either for one account let alone three.

Some might for the debit card option and may even have 50 or 60 Virgin Money M Plus current accounts for the £1,000 @ 2% pa in each of them.

RobM99

"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."

Really?

ZeroSum

anotheruser said:

For my own notes:
1% - £1.46 pm
2% - £3 pm
3% - (would be £6 twice a year, but change water bills to quarterly, which makes £12 pa as over the £5 limit for that tier)
TOTAL: £66
- £24 (fee) = £42

Same with the full fat 123 account but adding the 1% interest on balances for say £5000 would mean:
TOTAL: £66 (cashback) + £50 (interest) = £116
- £48 (fee) = £68

Club Lloyds (using the same £5000 reference) = £40pa
Halifax free £5 = £60

The difference of £20 a year (my current bank) isn't worth moving all the funds, new cards, changing payment methods on websites, Google Pay plus more.


As others may store more than £5000 in there, you can see why I question why people use the Lite account more than the normal version.  Perhaps there's a lot more people interested in messing about with savings accounts than what I thought.

If you're happy throwing away a couple of hundred of quid a year then that's upto you. However given it's a money saving forum, why does it surprise you that many on here goto extremes?

Me? I keep a few hundred in123 lite which covers DD's for which I get about £5 a month  (£10 next couple of months)
I have 2 Halifax Reward accounts that I keep nothing in & get £10 a month.

My personal savings are currently in zopa at 1.85%. Joint savings with virgin getting 2% on 1st £1k, then 1.71% on rest.
With faster payments, it's just a click of a button when you need to top up your current accounts & no hassle. And no idea what you're on about with regard to new cards & payment methods, as I don't really use debit cards (apart from currently using chase, but will ditch once cashback offer is over)

User36750

Daliah said:

anotheruser said:

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).

The 123 full fat used to be superb for keeping £20k in them at all times, especially when you could have any number of them. I used to have 4 (to keep under £85k) for a long time. But it's now been years since that account has just not been worth having any longer.

With Faster Payments, transferring money here there and everywhere is a doddle, and it's obviously not a task that's required daily. But as with everything - you are free to do what you like with your cash. If keeping it in a 123 full fat floats your boat, keep it there. If making 3 times the interest is more your thing, you wouldn't go near a 123 full fat these days.

The issue is keeping money in a bank that isn't particularly well known and may not have an app, so transferring money in and out all the time, for the sake of £10 a year, I can see many people not bothering as the amount of time you spend transferring money is probably worth more than the £10 you'd get keeping the money in the higher savings account.

If it's £85,000 then yes, perhaps worth it but the OP specifically stated around £5000 so I guess that's their rough current account balance with other savings held elsewhere.

Having about £5000 in a current account seems sensible.

User36750

ZeroSum said:

anotheruser said:

For my own notes:
1% - £1.46 pm
2% - £3 pm
3% - (would be £6 twice a year, but change water bills to quarterly, which makes £12 pa as over the £5 limit for that tier)
TOTAL: £66
- £24 (fee) = £42

Same with the full fat 123 account but adding the 1% interest on balances for say £5000 would mean:
TOTAL: £66 (cashback) + £50 (interest) = £116
- £48 (fee) = £68

Club Lloyds (using the same £5000 reference) = £40pa
Halifax free £5 = £60

The difference of £20 a year (my current bank) isn't worth moving all the funds, new cards, changing payment methods on websites, Google Pay plus more.


As others may store more than £5000 in there, you can see why I question why people use the Lite account more than the normal version.  Perhaps there's a lot more people interested in messing about with savings accounts than what I thought.

If you're happy throwing away a couple of hundred of quid a year then that's upto you.

My personal savings are currently in zopa at 1.85%. Joint savings with virgin getting 2% on 1st £1k, then 1.71% on rest.

With faster payments, it's just a click of a button when you need to top up your current accounts & no hassle.

It's not just the click on a button though.
It's logging in, checking balances, transferring some money, then logging in to the other bank app, then checking to see the money has gone in okay.
May take just 5 mins, but 5 mins every week probably isn't worth it for the OP.

They aren't talking about astronomical amounts of money - just £5000.

Say they put just £1000 in the 123 account, the rest in the virgin account - £3000 at 1.71% is £50ish a year, £1000 at 2% is £20, so £70 a year on that £4000 and that's as long as the balance is no less than £4000. 

Let's then say you transfer money / check you aren't going to go overdrawn every week and it takes 5 minutes. 5*52 = 260 minutes a year = 4hours 30 mins.
That's 17.50 an hour.

However, it would also be worse as you'd have to offset the amount the OP would gain by keeping the money in the Santander 123 account, which luckily they supplied at £50 (I think it was?).

So when you get down to the nitty gritty math, it's probably closer to £10 an hour. If you're happy to work for £10 an hour, great. For some people, their time is worth more than that.

Eco_Miser

RG2015 said:

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.
   
   

There's a simpler meaning to entitled which I believe others are using here, namely, having a right <to something>.
So, if everyone has a right to a free basic bank account, they are entitled to it, even the millionaires who would prefer to pay for better service.

Eco_Miser

anotheruser said:

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

And 40 years ago, nearly every bank account made a charge. People forget that also.

20 years ago, the free banking was paid for by the total lack of interest on current accounts, not even a nominal 0.01%.

Then interest paying current accounts were introduced as loss leaders, then accounts with fees that were waived if you paid in (or out via direct debit) a certain amount every month, and the question of who is paying for it got complicated. It's probably the shareholders, via the marketing budget.