Santander 123 current accounts

No_Name · 18 April 2017 at 1:25PM

Is it still viable to have these accounts if only holding say 8k in each account?

The rate has gone down but the monthly fee has gone up. Ignoring cashback, is it still worth hanging onto these in case the rates do go up?

Or would it be better just to close these down and re-apply?

Bear in mind that I'm an early adopter, meaning I have more than 1 - 2 accounts!

[Deleted User] · 18 April 2017 at 1:41PM

No_Name wrote: »

Is it still viable to have these accounts if only holding say 8k in each account?

The rate has gone down but the monthly fee has gone up. Ignoring cashback, is it still worth hanging onto these in case the rates do go up?

Or would it be better just to close these down and re-apply?

Bear in mind that I'm an early adopter, meaning I have more than 1 - 2 accounts!

You should be able to do the sums yourself:
Monthly interest - monthly fee = £ ?
If you have several accounts holding around £8k I would have thought it would be better to combine them to make up £20k to avoid needlessly paying the monthly fee several times over.
I think at the moment the chances of the interest rate going up is about the same as the likelihood of Donald Trump joining a Catholic Convent.

eskbanker · 18 April 2017 at 1:43PM

If you're holding £8K in a 123 account without any DD cashback, then you're earning £8K * 1.5% - £60 = £60 = 0.75% interest.

So, in simple interest terms, if you can beat that elsewhere (shouldn't be difficult!) then do so.

Nobody has a crystal ball about rates but at some point base rates will increase - however, Santander may choose to handle this by introducing new products rather than bumping up rates on existing ones....

chockydavid1983 · 18 April 2017 at 2:39PM

Depending on what other accounts you have, it can probably be pretty easily beaten elsewhere.
I have a 123 lite for cash back and so I can have the regular saver.

EachPenny · 18 April 2017 at 2:47PM

I'd agree with eskbanker that any future rate increases would only apply to brand new products.

But I would probably hedge my bets by combining money into one account to get up to the 20k limit, then downgrade the other account to the 'Lite' version. There may be no long-term benefit from doing this as the downgrade may rule out a future advantage, but it would keep a possible 'right' of having multiple accounts available for you in the future.

And rather than just closing the accounts, always look to see if there is a switching opportunity

No_Name · 18 April 2017 at 3:55PM

Thanks for the replies. I have exhausted other decent paying current accounts except for Tesco.

I'm also a higher tax payer!

EachPenny · 18 April 2017 at 4:25PM

And all the regular savers too?

Natwest Savings Builder pays 1.5% on up to 5k, providing you add an extra 100 per month. Useful for a small amount at a similar rate to the 123 account.

Premium bonds?

No_Name · 18 April 2017 at 6:06PM

Thanks EachPenny - wasn't aware of that Natwest saver.

I've got most of the regular savers - FD, Nationwide, Santander, Lloyds, TSB and Halifax.

I've still got 20k headroom on premium bonds - might need to buy myself that recurring 20,000 chances to win that million!

RG2015 · 18 April 2017 at 6:31PM

The NatWest saver has an advantage of being the only regular saver allowing lump sums deposits. You can deposit £5,000 on day one and earn 1.5%. You could also choose to deposit £10,000 on day 1 but the second £5,000 only earns 1%.

Please check the crazy rules as the £100 monthly increase is measured on the penultimate working day of the month. If you miscalculate you get no interest that month.

I started with £4,100 and when I get to £5,000 I will transfer out £5,000 to earn something in another account and then transfer £4,200 back in after 30 days or so.

Yes, it can get convoluted but I deem it to be a good option for the arithmetically adept!

EachPenny · 18 April 2017 at 6:58PM

RG2015 wrote: »

Please check the crazy rules as the £100 monthly increase is measured on the penultimate working day of the month. If you miscalculate you get no interest that month.

I started with £4,100 and when I get to £5,000 I will transfer out £5,000 to earn something in another account and then transfer £4,200 back in after 30 days or so.

The rules are certainly a challenge, as is interpreting the monthly statement!

I started mine on £5000 to maximise the 1.5% benefit and add £100 per month - it doesn't matter much that the extra 100's are only getting 1% as the place they are coming from only pays 1.05% so I'm not losing much. I will keep it going like that for as long as possible, because I want to minimise the number of times the £5000 has to be taken out of the account for a month. However, with newer issues of regular savers coming out it may be everything goes elsewhere anyway

ceredigion · 18 April 2017 at 7:22PM

No_Name wrote: »

Is it still viable to have these accounts if only holding say 8k in each account?

The rate has gone down but the monthly fee has gone up. Ignoring cashback, is it still worth hanging onto these in case the rates do go up?

Or would it be better just to close these down and re-apply?

Bear in mind that I'm an early adopter, meaning I have more than 1 - 2 accounts!

Quiet tip :shhh:
If you were to put all the £s in one of the accounts. Remove the DDs from the other account and not pay anything in, the fee isn't taken leaving a dormant 123 account

Santander 123 current accounts

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