Santander Edge current account

Bridlington1

km1500 said:

RobM99 said:

"Keeping £4,000 in the Edge savings account would to some extent pay for the £3 monthly charge."

More than that, 4% on £4000 = £13.33 a month, no?

The £4k is effectively paying you a 1.2% uplift (as you can get 2.8-ish elsewhere) so 1.2% x 4000 is about £48 p.a.

If you pay tax on savings interest that £48 drops.

Plus you can currently get 5% on up to £5k at Barclays, 5.25% on the club Lloyds monthly saver (£400/mth), 5% on Natwest/RBS regular savers (up to £5k each from December), 4.5% with the BOS, Lloyds and Halifax regular savers. You'd need to have well over £19k in savings for a 4% savings account to be worth it even without the fee.

Even if you have over £19k, as soon as an EA account comes along paying 3.1%, the fee and the interest difference would cancel out anyway, so you'd be reliant on the 1% cashback to take you into profit and even then as already mentioned you can get 1% cashback with Chase. 

artyboy

Thanks for flagging this OP. As with others, it doesn't stack up for me versus my 123 Lite - I really wouldn't use the debit card... if the 4% savings account was not limited to a year it would probably swing it, but as it stands, it's really just a one off bribe to encourage people away from the (now) legacy 123...

RobM99

Why do they have a linked savings account and not simply pay 4% on up-to £4,000?

Band7

RobM99 said:

Why do they have a linked savings account and not simply pay 4% on up-to £4,000?

That would be too easy to understand for their customers...........

They would have designed these accounts with their costs and profits in mind.

RobM99

Band7 said:

RobM99 said:

Why do they have a linked savings account and not simply pay 4% on up-to £4,000?

That would be too easy to understand for their customers...........

They would have designed these accounts with their costs and profits in mind.

It's confusing, having to use a calculator and 4 sheets  of A4!

wmb194

RobM99 said:

Why do they have a linked savings account and not simply pay 4% on up-to £4,000?

To move you to pay a fee and make the current account appear more attractive.

surreysaver

RobM99 said:

Why do they have a linked savings account and not simply pay 4% on up-to £4,000?

You have to log in to move your money around, so its easier for them to try and sell you other products

Or so they can charge you interest if you forget to move money from your savings to your current account

Newly_retired

Martin has written a good analysis of this new account in his email, including comparisons with other accounts, and use of Chase for cashback.

Band7

Newly_retired said:

Martin has written a good analysis of this new account in his email, including comparisons with other accounts, and use of Chase for cashback.

It's actually Benjamin Taylor who has written the analysis. It's a very good write-up, though not entirely accurate. For instance: 

• it claims "it's possible to get 1% cashback on most spend – at least for the next year –  WITHOUT switching to Edge. You can do this by opening up a Chase current account alongside your existing 123 Lite account" - which is clearly not the case for those whose existing Chase cashback ends in less than 12 months.
   
• it claims that there is no Chase cashback on bills.  Whilst it is true that Chase doesn't offer DD cashback, some people could pay some of their bills manually by debit card, and get the 1% debit card cashback with no cap - though obviously with an end date of that offer looming
  
  
• the analysis crucially also doesn't mention that there are other cashback cards (AMEX, RBS/Natwest) which might be an even better alternative for the card-based cashback, not least because they have fewer exclusions, and they are easier to use because you don't have to have 'dead' money sitting in a non-interest-earning current account. My be MSE doesn't want to encourage credit card spending
  
  
• the suggestion that you could make more from switching than from cashback is obviously only of use to those who haven't already exhausted the switching offers to date. It's a supper suggestion for those who can still switch for a bonus, though
  
  
• there is clearly no way MSE could keep the promise that they will of course, update us if Edge may become a better bet than Chase cashback. 
  
  
• experienced forumites wouldn't waste the Halifax Reward cashback on paying for goods and services. But I appreciate this is beyond the scope of an official MSE write-up
  
  

WillPS

Band7 said:

• it claims that there is no Chase cashback on bills.  Whilst it is true that Chase doesn't offer DD cashback, some people could pay some of their bills manually by debit card, and get the 1% debit card cashback with no cap - though obviously with an end date of that offer looming

Presuming that the service provider don't use one of the many (many!) MCCs which Chase won't pay cashback on. 

Band7 said:

• the analysis crucially also doesn't mention that there are other cashback cards (AMEX, RBS/Natwest) which might be an even better alternative for the card-based cashback, not least because they have fewer exclusions, and they are easier to use because you don't have to have 'dead' money sitting in a non-interest-earning current account. My be MSE doesn't want to encourage credit card spending

The various requirements probably complicate this message unfortunately. Taking the RBS/Natwest example (which is a brilliant and very underrated product IMO), you have to pay an annual fee which is waived if you take a Reward current account which again has a fee (albeit one which can easily yield a monthly cashback by itself). On the Amex examples you'll have either annual fees or min spends or limitations in terms of how your rewards will be paid.

Band7 said:

• the suggestion that you could make more from switching than from cashback is obviously only of use to those who haven't already exhausted the switching offers to date. It's a supper suggestion for those who can still switch for a bonus, though

I agree, I don't understand why MSE so often presents this as an either/or. You can have every cake available (and eat it) perfectly legitimately.