Stick with Santander 123 Current Account or Switch to Santander Edge Current Account?

PRAISETHESUN

Im pretty sure that it's never been recommended to use 123 for the interest. There's better savings accounts with higher interest, especially as the monthly fee eats into the effective interest rate by a fair bit (£60/year of fees represents a big chunk of interest). For cashback you can compare your current 123 cashback to the Edge account cashback calculator to see if you'd be better off or not.

superleeds27

https://forums.moneysavingexpert.com/discussion/comment/81966470#Comment_81966470

Balance is roughly 28. You need over 20 I think to earn the most amount of interest.

Can't find the rate at the minute, but it works out at £33 a month. Then minus the account fee which is going up to £5 in may I believe.

Edit: looks like the rate is 2%?

superleeds27

https://forums.moneysavingexpert.com/discussion/comment/81966498#Comment_81966498

Used the calculator on Santander website and I wouldn't be better off with the edge account. I'd be roughly £9/£10 worse off in interest

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/81966511#Comment_81966511

That doesn't sound right, you are saying you earn £33/mth (~£400/yr) on £28k? That's an interest rate of 1.42%.

Believe the 123 pays 2% on balances up to £20k, nothing on the remaining balance, the numbers look right.

Minus the fee that's going up to £60/yr in May.

Are you comparing like with like? You'd have to find somewhere else to put that 28k, 4k could get 6% in a Santander Edge saver (That's £20/mth income on it's own), the rest should find 4% easily elsewhere.

Stargunner

Interest of 2% is only paid on balances up to £20k, so you have £8k earning no interest. You could be earning more than double what you are receiving a month in interest by having your savings in other savings accounts.

PRAISETHESUN

https://forums.moneysavingexpert.com/discussion/comment/81966511#Comment_81966511

For the moment ignore the interest and focus only on the DD cashback. As others have said, you can easily get better interest by moving your savings (£28k?) to one of the top easy access savings accounts:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

For the cashback do a like for like comparison for DDs only and see which is better. Probably the 123 account will still come out on top, but it's worth checking.

superleeds27

https://forums.moneysavingexpert.com/discussion/comment/81966573#Comment_81966573

Tbh, the DD cashback is irrelevant. I don't have any DD (Mobile i guess) that would earn cashback.

PRAISETHESUN

https://forums.moneysavingexpert.com/discussion/comment/81966658#Comment_81966658

In which case you're almost certainly better off downgrading to an Everyday account and then moving your savings to an easy access account

superleeds27

https://forums.moneysavingexpert.com/discussion/comment/81966662#Comment_81966662

So at the minute i have a bog standard everyday account that i've had for years. I use this as the card in the wallet to pay for things. The bulk of the other money is sat in the 123 account.

I basically topup the everyday account as and when needed with money from the 123 account.

The 123 account has 2 DD attached two it at the minute (I guess these can be shifted to the everyday account)

Assuming it'd be better for me to move the 123 account to an easy access saving account somewhere else and carry on as I am?

friolento

You are definitely not gettiing the best you could get. As others have mentioned, there are a number of savings accounts which easily beat what you get at present.

If you want a current account which pays interest, have a look at Kroo or LHV. LHV is a tracker, currently at 4.25%. I like LHV - only limitation I know of is their withdrawal limit which may or may not be an issue for you, so check the T&Cs thoroughly. I never liked Kroo myself as they do weird things like blocking incoming payments from totally legit sources.

Another option, but just for £4k, is the Santander Edge Saver. You can get that when you have an Edge current account, and it is possible to have this account alongside other Santander current accounts, and without paying the monthly fee. Look for the threa bout this on this forum.

Here is what I would do if I were you:

1 - immediately "upgrade" the 123 to an Everyday current account

2 - apply for an Edge account. Go whether TopCashback has any offer for it

3 - open an Edge Saver

4 - transfer £4k from the Everyday to the Edge saver

5 - apply for a Cahoot Sunny Day savings account, Again, check whether TCB have an offer for it. Put £3k into it

6 - assuming you like the LHV, apply for it and put the remainder of your money in

7 - once a month, skim off the interest from the Edge Saver and the Cahoot Sunny Day, into the LHV account