Santander to slash 123 account interest and shake up overdrafts

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ColdIron
ColdIron Posts: 9,049 Forumite
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Even less reason to keep the full fat 123 now
  • At the moment, the 123 account pays 1.5% AER on balances up to £20,000, as well as up to 3% cashback on selected household bills, for a £5 fee.
  • But the bank's now revealed that from 5 May 2020, it will be cutting its savings rate to 1% AER and capping its cashback at £5 per month in each of its cashback categories, for new and existing customers. The £5 monthly fee will remain the same.
https://www.moneysavingexpert.com/news/2020/01/santander-to-slash-savings-rates-and-shake-up-overdrafts---what-/
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  • Neil_Jones
    Neil_Jones Posts: 8,913 Forumite
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    Saw it coming...

    Presumably Lite isn't changing beyond the £5 cashback cap, not that it bothers me as I get well below it in each category anyway...

    No real reason now after May to stick with the main account at all IMO. Lite or nothing.
  • colsten
    colsten Posts: 17,597 Forumite
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    More depressing news. 2020 is not doing great so far, and the outlook is bleak.
    ColdIron wrote:
    Even less reason to keep the full fat 123 now
    Neil_Jones wrote: »
    No real reason now after May to stick with the main account at all IMO. Lite or nothing.
    I easily get £5 cashback a month. I have done the 5% FlexDirect, I currently need more than £5k a month for DDs and SOs, so my immediate reaction is to keep the account, albeit with a slightly reduced balance.
  • Fingerbobs
    Fingerbobs Posts: 1,640 Forumite
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    colsten wrote: »
    More depressing news. 2020 is not doing great so far, and the outlook is bleak.



    I easily get £5 cashback a month. I have done the 5% FlexDirect, I currently need more than £5k a month for DDs and SOs, so my immediate reaction is to keep the account, albeit with a slightly reduced balance.


    The cashback cap is £5 per category, not total.
    I never exceed that now anyway.
  • castle96
    castle96 Posts: 2,885 Forumite
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    same here, as Colsten. It is my main funding a/c. Shame. 1.5% gross was 'ok' in current climate
  • Snakey
    Snakey Posts: 1,174 Forumite
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    Oh that's a shame. I only had the "lite" version but the £10 cashback on the mortgage was nice to have. Soon to be only £5.
  • colsten
    colsten Posts: 17,597 Forumite
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    Fingerbobs wrote: »
    The cashback cap is £5 per category, not total.
    Even better then, as I'll maintain my monthly £9 - £10 then.

    Although I have no insight into how much people keep in full-fat 123s, I have a sneaky feeling this change might actually hurt Santander more than it hurts those who move/change their accounts now.
  • poshphil
    poshphil Posts: 38 Forumite
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    What are the best options for larger balances now? I just upgraded our lite account to a full one literally last week and moved our emergency savings (roughly £8k) there (we also carry another £3-5k on top for most of the month following payday) as it was safe, easy access and an OK interest rate (I appreciate I could do better if I split it and moved around accounts) for an account I just left to run.

    We set up a 123 account when getting our mortgage as the £10/month cashback made that the most competitive so that's also slightly frustrating.
  • schiff
    schiff Posts: 20,099 Forumite
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    I've been with Santander since the Alliance & Leicester days and it is quite definitely my main current account. The sum total of my balances at other current accounts, opened for the attached regular savers, is under £100 - except for TSB of course, and they too are surely going to follow the herd in time. The Santander receives my pensions and it services most of my regular bills - council tax, phones, etc - and SOs to a handful of RSs, as well as deposits to other banks to pay SOs to regular savers. So it would be a monumental shift to sort out something else. Santander has also accepted deposits to and receipts from bookmakers without demur for many years, and other banks may not be as accommodating.

    It will though make sense for me to move to the Lite version. I'm getting more than £5 a month cash-back, with no category above £5, so the cash-back less the £1 per month is profit.

    I've been turning my back on RSs paying 2% interest. I may have to re-visit that!
  • schiff
    schiff Posts: 20,099 Forumite
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    colsten wrote: »

    I easily get £5 cashback a month. I currently need more than £5k a month for DDs and SOs, so my immediate reaction is to keep the account, albeit with a slightly reduced balance.

    Pretty much me too!
  • ceewash
    ceewash Posts: 1,341 Forumite
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    Anyone moving their account? Where to?
This discussion has been closed.
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