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Kim_13 wrote: »

The launch of the Santander 123 Lite account has also had an impact, as it means that the same cashback can be earned for £4 less per month. This account is listed in the accounts best for cashback section of the best bank accounts guide.

Essentially this means customers are paying £4 per month to be able to earn 1.5% interest - something that can be beaten by other current accounts or Regular Savers.

The best instant access savings is 1.35%, which would yield around £30 less interest a year on the full £20,000. The 'extra' in account fees is £48.

That said many Instant Access rates have a time limited bonus, so it does mean moving the money now and again.

None of which explains why the 123 account has been removed from the guide (this is not a criticism of your post). None of the other accounts recommended are right for everyone, so it is an arbitrary decision to remove 123.

The 123 account still offers a good interest rate on a large balance (better than any easy access savings account, and better than any other current account, when you take into account the size of balance). For many people the cashback covers the account fee (or nearly does).

Three Bank of Scotland Vantage accounts would equal the interest, but you would need 6 different direct debits to operate them, which for many would not be possible if they also wanted the cashback from the 123 Lite.

MSE's decision to remove it from the guide is just silly, especially when the guide includes accounts that deliver a lot less, e.g. Tesco, which offers a maximum of 3% AER on £6000 (for those unable to take advantage of joint accounts), which equals £177.60, i.e. only 59.6% of the possible return from Santander (and the Tesco accounts would require 6 direct debits to achieve this).

It is true that the 123 account was better when the monthly fee was only £2 and it paid 3% interest, but that doesn't mean it is necessarily a poor choice now.