Santander 123 - Back to Being Worth it?

Daliah

User36750 said:

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.

None of what you said there is an argument for keeping a full fat 123. It’s not been value for money for years, for anybody. Of course people are entitled to keep their money in accounts that aren’t value for money, but that’s hardly what an MSE would do. There’s even been a long MSE article about ditching the 123 full fat, way back in January 2020, it’s such bad value these days.

I also don’t agree with the blanket statement that having £5K in a current account is sensible. It might be sensible for you but not everyone has the same circumstances as yourself. For example, it used to be sensible for me to keep £80k in 4 Santander full fat 123 current accounts but these days, I have just 2 Santander current accounts, none of which is full fat, and both of which have a balance of less than £200 for most of the time. I transfer money from savings accounts, held even at providers which aren’t particularly well known, on an as-needed basis. I do all my banking with apps as much as possible and find that all the top rate savings accounts have apps. Some are even app-only.

The benefits for me are also a lot more than £10 a year. Taking your ‘sensible’ £5,000 as a steady balance. That would currently yield the princely sum of £2 net after a year - £50 in interest minus £48 in account charges. I get £105 interest for my £5,000 and pay £24 for my Santander Lite, leaving me with £81 at the end of a year. Feel free to argue that £81 isn’t worth your while but it certainly is mine.

ZeroSum

User36750 said:

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.

Why would I need to check if I go overdrawn? 
I know what my DD's are (about £500) so I keep that in 123. 
Then my spend is on a credit card. It's a once a month transfer.

Personally think £5k is an excessive amount to keep in current account (fair enough if it pays a half decent rate like lloyds used to, or in 1st year of nationwide) I've really no need to keep anymore than a few hundred emergency float

It also doesn't take 5 mins to check, it takes 10 seconds. It's also something you should do as a fraud check anyway on a regular basis (yes it sort of contradicts my first comment, but I know I'm not going overdrawn unless it's fraud)

Then there's one big thing you're overlooking. You see it as a chore, I suspect many on here view it as a hobby.
Personally, I'm a bit of a maths geek & actually enjoying the number crunching & spreadsheets

phillw

RG2015 said:
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.

Three £500 debit card transactions a month for £15 is not worth it to you I guess.

Virgin Money is pointless right now as you can beat 2% in Al Rayan.

phillw

User36750 said:
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.

Move all your DD to the start of the month, setup open banking and enable text alerts. Just from halifax/natwest/rbs rewards you can make £21 a month by moving money around on your mobile (which you can do while you sit on the toilet in the morning).

Even if it takes you 21 minutes a month (which I doubt), that is £1 a minute or £60 an hour.

If someone has suggestions for unskilled work that guarantees £60 an hour, which can be done at home, then I'm all ears.

Constantly moving money to the best savings accounts, including funding regular savings, provides much less of a return. I try to reduce the amount of time I spend, but in some ways it's a bit of fun. I don't cost all my time, otherwise I'd never post here.


FWIW Octopus had reduced my direct debit, so I've increased it again in time for my next DD payment to maximize the 4% cashback.

Daliah

phillw said:

.....setup open banking 

I am intrigued - how do you do this, and how do you use it to shuffle money about, e.g. to/from Natwest? I still use the old steam-powered Faster Payments, keen to use OB if I can

phillw

Daliah said:

phillw said:

.....setup open banking 

I am intrigued - how do you do this, and how do you use it to shuffle money about, e.g. to/from Natwest? I still use the old steam-powered Faster Payments, keen to use OB if I can

I was suggesting open banking for checking all your balances without having to login to multiple apps.

It's supposed to be possible to initiate transfers using open banking, at least it's listed in the permissions granted, but I haven't ever seen it implemented. I expect it would still use faster payments anyway.

In America you can hook up your savings account to your current account and it will transfer automatically if you are overdrawn, that would be the dream...

Daliah

phillw said:

I was suggesting open banking for checking all your balances without having to login to multiple apps.

Ah ok, fair enough. It's of limited use though because scores of the savings providers don't do OB. But most of them do apps, so it's v quick to log in

phillw said:

It's supposed to be possible to initiate transfers using open banking, at least it's listed in the permissions granted, but I haven't ever seen it implemented. I expect it would still use faster payments anyway.

Tandem and Zopa offer it, and so does Tesco Clubcard Pay+. It's actually quite a smart principle, though you have to watch what authorisations you give. I use it all the time with Zopa.

phillw said:

In America you can hook up your savings account to your current account and it will transfer automatically if you are overdrawn, that would be the dream...

I think you can enable this with Virgin Money M Plus and its attached saver. Haven't used it myself though

Daliah

RG2015 said:

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.

I don't hold a penny in any of my 5 Halifax Rewards but I am happy to do what it takes to get £25 a month, £300 a year, tax free. I haven't timed it but if it takes 15 minutes a month for all 5 accounts, that would be a lot. 

RG2015

phillw said:

RG2015 said:
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.

Three £500 debit card transactions a month for £15 is not worth it to you I guess.

Virgin Money is pointless right now as you can beat 2% in Al Rayan.

Re Halifax, correct. Contriving debit card transactions is not something I would choose to do.

Re Virgin Money, almost pointless but not quite yet. 2% is still fine for me at the moment. Al Rayan have a minimum balance of £5,000 and even if this was possible in VM the difference is only £5 p.a.

phillw

RG2015 said:
Re Halifax, correct. Contriving debit card transactions is not something I would choose to do.

In my case those debit card transactions are money that I'm sending somewhere, but I'd still do it anyway as it's so well paid.