Santander 123 rises to 1.5%

subjecttocontract

I've got a full 123 account. Last month interest received was £9.33, direct debit income was £6.58 & the fee was £4.
The account works for me. We own some properties and I often pay for 'stuff' using the Santander account. Could I move the account somewhere else ? Yes. Do I want to? No......I can't be bothered for the sake of getting another £50 a year.

phillw

Astria said:
I think I've got enough bank accounts and don't really want more for such a small amount of extra interest.

60% more interest is a small amount?

£300 vs £500

Astria

ZeroSum said:

Astria said:

Depends. The break even is £2,400.

How do you get that figure? £2000 * 0.015 = £30, minus 20% = £24 / 12 = £2.

ZeroSum said:

Whilst I do get the argument around convenience, what you also have to remember is this is a forum dedicated to saving money. And convenience is something that costs money.

Yes, that said, once I get my switching bonus I'll now be changing my account to a lite, so I still get the DDs (which gives more than £2 cashback so that's OK), and moving the rest of the money to a better paying account paying at least 2%.

Lite is £2 a month. Full fat £5
So you need to recover £36 a year which is £2,400 × 1.5%

If you're paying tax on interest, then it's even higher.

Sorry I was under the impression that the full fat account was £4/month, I'll definitely be changing it if its £5/month as that makes it even less value for money.

Just checked:

subjecttocontract

It IS £4 a month NOT £5.

ZeroSum

Astria said:

ZeroSum said:

Astria said:

Depends. The break even is £2,400.

How do you get that figure? £2000 * 0.015 = £30, minus 20% = £24 / 12 = £2.

ZeroSum said:

Whilst I do get the argument around convenience, what you also have to remember is this is a forum dedicated to saving money. And convenience is something that costs money.

Yes, that said, once I get my switching bonus I'll now be changing my account to a lite, so I still get the DDs (which gives more than £2 cashback so that's OK), and moving the rest of the money to a better paying account paying at least 2%.

Lite is £2 a month. Full fat £5
So you need to recover £36 a year which is £2,400 × 1.5%

If you're paying tax on interest, then it's even higher.

Sorry I was under the impression that the full fat account was £4/month, I'll definitely be changing it if its £5/month as that makes it even less value for money.

Just checked:

It used to be £5 before the interest rates were slashed. Still need £1,600 to break even which is a lot more than max DD payout

crumpet_man

Daliah said:

crumpet_man said:

If people are using the 123 as a hub/feeder account for SO/DD, why not use Chase savings at 1.5% instead?  Same interest rate but no fee.

Chase are really being left in the dust now when it comes to savings rates. They can't touch Barclays on up to £5K, and now Virgin have completely invalidated the Chase rates. I gather you can set up your current account to automatically pull in money from the linked saver, so it's even easier than with Chase. Virgin also have online access alongside their app, so there's a backup if there's a technical problem. Not that Virgin have had anything like the number of issues Chase had.

With Virgin  you can set it up to move money from Savings to Current account but it's not as useful as it could be as it the amount moved has to be at least £100.  Not such an issue now that the savings rate is the same as the current account rate.

I do agree that Chase have been left behind.

GalacticaActual

Santander have increased the interest by 0.25% to 1.75% from today, 8th November 2022 (?)

1|2|3 Current Account | Santander UK

Band7

GalacticaActual said:

Santander have increased the interest by 0.25% to 1.75% from today, 8th November 2022 (?)

Still won't tempt me to ditch my 123 Lite. I am quite happy to xfer money manually from the 2.75% esaver as and when required.

WillPS

Band7 said:

GalacticaActual said:

Santander have increased the interest by 0.25% to 1.75% from today, 8th November 2022 (?)

Still won't tempt me to ditch my 123 Lite. I am quite happy to xfer money manually from the 2.75% esaver as and when required.

Same, poor show really. 

I actually might drop down to the fee free account for a few months as I've maxed out on energy cashback the last couple of months and will probably have enough credit now to get me to the spring. 

Marchitiello

Notepad_Phil 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.

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.

I have the Select account with 1-2-3 and usually make over £7 in DD cashback  (so netting me about £3 something) and on top of that, the small rolling balance I keep there to cover the DD and pay my son allowance and rewards payments makes another £0.50-£1 interest.

main reason I have it however is the forex free access in countries where Santander operates, and use of Select counters in those same countries (particularly Spain, East Coast US and South America). 

So, it does works for me too.