Santander 123 rises to 1.5% 3 October 2022 at 9:56AM in Budgeting & bank accounts 41 replies 3K views

Notepad_Phil

For anyone still using the full fat Santander 123 current account, it's now risen to 1.5%.

Hadn't heard anything about this until I logged in this morning and spotted the new rate.

Obviously there are better paying accounts out there, but it has its uses for people who e.g. use it as a hub to pay standing orders out to multiple regular saver accounts and have enough direct debits to pay the monthly fee.

WillPS

Notepad_Phil said:

but it has its uses for people who e.g. use it as a hub to pay standing orders out to multiple regular saver accounts and have enough direct debits to pay the monthly fee.

Not sure that's a good use case. The person in question would be better off using a Santander 123 Lite for the DDs and a Virgin or similar interest paying account for the multiple regular savers.

Daliah

Don't forget it costs £4 a month.

This effectively reduces the interest rate to 1.26% on an account that is fully loaded with £20k all the time. That's a little over half of the currently best instant access rate. If you keep less in the account, the 123 interest rate is even worse.

Notepad_Phil

WillPS said:

Notepad_Phil said:

but it has its uses for people who e.g. use it as a hub to pay standing orders out to multiple regular saver accounts and have enough direct debits to pay the monthly fee.

Not sure that's a good use case. The person in question would be better off using a Santander 123 Lite for the DDs and a Virgin or similar interest paying account for the multiple regular savers.

Depends on how many regular savers you have coming out of your account and how many months you want to leave it before you have to replenish the account  - or can the linked saver do standing orders too?

Daliah said:

Don't forget it costs £4 a month.

This effectively reduces the interest rate to 1.26% on an account that is fully loaded with £20k all the time. That's a little over half of the currently best instant access rate. If you keep less in the account, the 123 interest rate is even worse.

Absolutely, so not good for everyone. But it makes sense for me, and may well do for others, but they must use it with their eyes wide open.

Alex9384

Daliah said:

Don't forget it costs £4 a month.

This effectively reduces the interest rate to 1.26% on an account that is fully loaded with £20k all the time. That's a little over half of the currently best instant access rate. If you keep less in the account, the 123 interest rate is even worse.

Just out of curiosity, why no one is talking about this?

Daliah

Alex9384 said:

Daliah said:

Don't forget it costs £4 a month.

This effectively reduces the interest rate to 1.26% on an account that is fully loaded with £20k all the time. That's a little over half of the currently best instant access rate. If you keep less in the account, the 123 interest rate is even worse.

Just out of curiosity, why no one is talking about this?

It's talked about quite a lot over on the savings board. As are others, such as the 'proper' 1.5% savings account at Chase which supports SOs and DDs. Whether either of these these accounts is suitable as a hub account depends on the amount you want to put through every month, and whether they'd still pay you more than a 123 with cashback.

I swapped my 123 full fat years ago for a 123 Lite, keep my savings with other providers, and transfer money as needed into the 123 Lite. It usually has a near zero balance most days, and it pays me a net £70ish a year. I would use the Barclays account as a pure savings account if they'd let me have one - but it seems they have banned me after I switched my remaining Barclays current account last month. They say I need an appointment in Branch to process an application - no chance, since there isn't even a Barclays Branch within 20 miles now.

Astria

WillPS said:

Notepad_Phil said:

but it has its uses for people who e.g. use it as a hub to pay standing orders out to multiple regular saver accounts and have enough direct debits to pay the monthly fee.

Not sure that's a good use case. The person in question would be better off using a Santander 123 Lite for the DDs and a Virgin or similar interest paying account for the multiple regular savers.

Considering how forgetful I am, I've had it before where accounts like Lloyds have charged me a management fee because I forgot to transfer money into there, or I've setup a SO and then forgot to fund the account it was coming out of.

It's not perfect by any means, but loading the account with 20K and using it as a hub for all my DDs/SOs works for me, and it doesn't matter if I forget about it for a few months.

phillw

Astria said:
Considering how forgetful I am, I've had it before where accounts like Lloyds have charged me a management fee because I forgot to transfer money into there, or I've setup a SO and then forgot to fund the account it was coming out of.

I am forgetful too, my solution is to have overdrafts set up on all the accounts SO/DD come out of that is large enough to cover them, I moved all the SO/DD to as close to the 1st of the month as possible and then setup up text alerts.

I also have setup one of my accounts to have all the others displayed using open banking, so I can easily see if any account is overdrawn.

I certainly wouldn't keep 20k in santander, if you're that forgetful then enough for 2/3 months tops.

WillPS

Astria said:

WillPS said:

Notepad_Phil said:

but it has its uses for people who e.g. use it as a hub to pay standing orders out to multiple regular saver accounts and have enough direct debits to pay the monthly fee.

Not sure that's a good use case. The person in question would be better off using a Santander 123 Lite for the DDs and a Virgin or similar interest paying account for the multiple regular savers.

Considering how forgetful I am, I've had it before where accounts like Lloyds have charged me a management fee because I forgot to transfer money into there, or I've setup a SO and then forgot to fund the account it was coming out of.

It's not perfect by any means, but loading the account with 20K and using it as a hub for all my DDs/SOs works for me, and it doesn't matter if I forget about it for a few months.

Surely setting up a few SOs with a couple of days lee-way (so as to ensure weekend days/bank hols etc are allowed for, but making sure money makes as much as it can) would prevent such a thing?

I personally do absolutely everything on the 1st of the month other than wait for any DDs to be paid (which go out around 3rd-5th); it involves a dozen or so transfers/faster payments and a handful of debit card transactions. It's quite therapeutic to know everything is set up and paid ready for the month ahead, and I've not yet missed the fact a new month has begun.

WillPS

Daliah said:

They say I need an appointment in Branch to process an application - no chance, since there isn't even a Barclays Branch within 20 miles now.

It's very frustrating that Barclays are at the forefront of the branch cutbacks and yet have done very little to stop their processes from being reliant upon them.

Feels like they're trying to have their cake and eat it.

Astria

phillw said:

I certainly wouldn't keep 20k in santander, if you're that forgetful then enough for 2/3 months tops.

Why ? because of the 1.5% rate? I know places like Yorkshire bank offer 2.5%, but I think I've got enough bank accounts and don't really want more for such a small amount of extra interest.