Santander 123 or Edge?

[Deleted User]

I've got a Santander 123 account (not Lite) which pays interest of 1.5% and 3% cashback on bills. The fee is £2. I'm thinking of changing this to an Edge account which pays no interest, the fee is £3 and just 1% cashback on bills. However, it does have the 4% savings account. Before I look to switch, can anyone advise why I shouldn't? I just cannot make up my mind. Many thanks 

Band7

Without knowing the size and types of your DDs (you don't get 3% on all of them on the 123), your expected spend on your Santander debit card, and the amount and length of time you are planning to save, it is not possible for anyone to work out  your best options.

ColdIron

The standard 123 account has a fee of £4 and pays 1.75% interest

https://www.santander.co.uk/personal/current-accounts/123-current-account

Zanderman

We did the sums recently and found that, if we had to choose, 123 would, for us, make a few pence more than Edge. But both only just broke even after the monthly fee. And the 123 was only a few pence more (less than 10p!). So on that basis there's little in it, on our figures anyway - you need to run your own and work it out.

Didn't actually go for either as we have a 123 Lite account that does better than both.

For interest Edge might appeal, but it depends on how much you keep in and whether other good interest offers might be better.

WillPS

4% savings on up to £4000 isn't worth paying £3/month for IMHO.

Barclays will give you 5% on up to £5000 with effectively no cost and a tiny bit of admin each month.

Natwest will do 5% up to £5k with the catch that it can only be drip fed in to at £150 per month if you hold a current account. RBS will do the same and you can have both.

There are a host of 1 year fixed linked savers (First Direct @ 7%, Club Lloyds @ 5.25%) which you can supplement these with. 

Ditch Santander fee-paying accounts unless you can make back the monthly fee from cashback. Don't factor the interest in when calculating profit because the reality is it's not as good as you can get elsewhere for nowt.

blue.peter

Firstly, I think you'd better check the actual account that you have - a £2 monthly fee for the full-fat 123 sounds wrong to me. I thought that it was £4.

Comparing the benefits of the accounts is fairly simple: Santander has calculators on the web pages describing the various accounts - scroll down to Cashback (under Account Details) and click on the down arrow to the right to open it up. Obviously, you ought to know what you're getting each month from your present account and how much you're paying for it. Just enter the relevant figures into the calculator for the new account in which you're interested, and see what difference it makes.

The answers will vary from one person to another, depending on what their bills are. for me, a 123 would definitely be better than an Edge if I was thinking of switching to Santander. It doesn't follow that the same will necessarily be true for you.

Dmclin

Update for late 2023
edge account now 3.5% instant access upto 25k (£875 pre tax interests) if you keep account  at the max allowed. 

AND 
another 4.5% (7.9% o stall ) on upto 4k if you add the saver edge up account 
but Only for 1st year 

as advised by others use the Santander online switch calculator for you own circumstances. 

If you are a higher rate taxpayer and your ISA and premium bond limits are maxed out then the edge and edge up accounts allow much larger amounts to be kept in instant access accounts than any other mainstream provider.   

Another strategy is:

Opening and  maturing several short to medium term fixed term high interest savings bonds  with more than one provider is still advisable for holding low risk higher yielding accounts.  You can have an account maturing every 3 -6 months to ensure access to larger planned amounts like a car or building work. 

p.s The cash back payments from edge accounts are now limited to modest amounts but will cover  the account fees. 

MikeJXE

[Deleted User] said:

I've got a Santander 123 account (not Lite) which pays interest of 1.5% and 3% cashback on bills. The fee is £2. I'm thinking of changing this to an Edge account which pays no interest, the fee is £3 and just 1% cashback on bills. However, it does have the 4% savings account. Before I look to switch, can anyone advise why I shouldn't? I just cannot make up my mind. Many thanks 

I can't make my mind up either 

I have the 123 for 10 years, when interest was 3% I would keep the maximum £20,000 in but now only a couple of thousand the rest is in higher interest paying accounts 
My DD cover the fee and I have some funds in the EA account 

 My pension goes in and all my direct debits come out so Santander know where every penny is on their paper trail 

I have done their online calculator comparing the 2 accounts and according to them I would be better off on Edge by a large amount, so large I don't believe it. 

I have their credit card too but I never activated it as at the time my spending didn't cover the fee

One day when I can be arsed I will do my own calculations, at the minute I am happy enough, never had a problem with Santander despite moving funds between a dozen switching accounts 

grumbler

WillPS said:

There are a host of 1 year fixed linked savers (First Direct @ 7%, Club Lloyds @ 5.25%) which you can supplement these with. 

If you mean Club Lloyds Monthly Saver, then it's 6.25% (and you can have it along with a normal Monthly Saver paying 5.25%)

flaneurs_lobster

grumbler said:

WillPS said:

There are a host of 1 year fixed linked savers (First Direct @ 7%, Club Lloyds @ 5.25%) which you can supplement these with. 

If you mean Club Lloyds Monthly Saver, then it's 6.25% (and you can have it along with a normal Monthly Saver paying 5.25%)

Was 5.25% in Dec 22 when @WillPS posted (this thread has been re-animated to look again at the Edge vs 123 question).

GeoffTF

The 123 Lite is the runaway winner for me. The calculators are misleading because they do not account for loss of interest on any money that you have in the account, and assume that you pay your everyday bills using their debit card rather than a credit card with cashback and an interest free period.