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  • FIRST POST
    • Terry98
    • By Terry98 14th Sep 15, 4:52 AM
    • 1,092Posts
    • 3,231Thanks
    Terry98
    Santander 123 current account fees rising to 5 in January
    • #1
    • 14th Sep 15, 4:52 AM
    Santander 123 current account fees rising to 5 in January 14th Sep 15 at 4:52 AM
    ........and the credit card fee is going up to 3 a month!

    http://www.telegraph.co.uk/finance/personalfinance/bank-accounts/11862290/Santander-123-current-account-fees-rising-to-5-in-January.html
Page 1
    • roddydogs
    • By roddydogs 14th Sep 15, 5:26 AM
    • 6,290 Posts
    • 2,686 Thanks
    roddydogs
    • #2
    • 14th Sep 15, 5:26 AM
    • #2
    • 14th Sep 15, 5:26 AM
    Still worth it if youve got 20k to spare which is worth 40 pm. Its a pain but cant say im surprised.
    • brewerdave
    • By brewerdave 14th Sep 15, 7:09 AM
    • 5,610 Posts
    • 2,493 Thanks
    brewerdave
    • #3
    • 14th Sep 15, 7:09 AM
    • #3
    • 14th Sep 15, 7:09 AM
    Still worth it if youve got 20k to spare which is worth 40 pm. Its a pain but cant say im surprised.
    Originally posted by roddydogs
    ...and for many people the interest will be worth 50 pm after the changes in treatment of tax on savings interest, coming in from April 2016.
    My DD rebates will still cover the monthly fee even at 5
    • robotrobo
    • By robotrobo 14th Sep 15, 7:23 AM
    • 866 Posts
    • 744 Thanks
    robotrobo
    • #4
    • 14th Sep 15, 7:23 AM
    • #4
    • 14th Sep 15, 7:23 AM
    Still worth it if youve got 20k to spare which is worth 40 pm. Its a pain but cant say im surprised.
    Originally posted by roddydogs

    Your right Rodders!, its even 50 for a non tax payer X4 = 80k, but its still a bit of a surprise to me.
  • jamesd
    • #5
    • 14th Sep 15, 7:38 AM
    • #5
    • 14th Sep 15, 7:38 AM
    Still worth it if youve got 20k to spare which is worth 40 pm.
    Originally posted by roddydogs
    Only if you don't want to invest, though. It's easy to get 12% from P2P investing and much of mine is at 14% and 19%. Stick just 5k into suitable P2P at 12% and you can make as much as on the whole 20k at Santander. Less things like bad debt potential but I'm only thinking of the P2P lending with secured loans to provide protection for capital so there isn't likely to be much of that.
    • abdul56
    • By abdul56 14th Sep 15, 7:38 AM
    • 41 Posts
    • 6 Thanks
    abdul56
    • #6
    • 14th Sep 15, 7:38 AM
    • #6
    • 14th Sep 15, 7:38 AM
    Thanks for letting me know. Its an increase of 150% to their current account fees. That hell of increase in profits.
    • colsten
    • By colsten 14th Sep 15, 7:54 AM
    • 10,541 Posts
    • 9,732 Thanks
    colsten
    • #7
    • 14th Sep 15, 7:54 AM
    • #7
    • 14th Sep 15, 7:54 AM
    Existing thread: http://forums.moneysavingexpert.com/showthread.php?t=5323821
    • roddydogs
    • By roddydogs 14th Sep 15, 8:08 AM
    • 6,290 Posts
    • 2,686 Thanks
    roddydogs
    • #8
    • 14th Sep 15, 8:08 AM
    • #8
    • 14th Sep 15, 8:08 AM
    Its "Easy" to get 12% plus..... with no risk? How.
    • edinburgher
    • By edinburgher 14th Sep 15, 9:12 AM
    • 11,505 Posts
    • 61,521 Thanks
    edinburgher
    • #9
    • 14th Sep 15, 9:12 AM
    • #9
    • 14th Sep 15, 9:12 AM
    This struck me as fairly inevitable, it was only a matter of time before they baited and (current account?) switched enough customers and reduced the benefits of the S123 account.

    Before Santander started offering the S123 account, they had a terrible reputation for customer service. The service for the new account (vs. previous accounts that I had opened with them) was greatly improved and the offering seemed reasonably generous (without being a total giveaway).

    I suspect that this will lose them quite a few customers. As our DD cashback (just) offsets the increased fees, we'll stay for now, but will need to keep a weather eye on further tweaking...
    • bowlhead99
    • By bowlhead99 14th Sep 15, 10:20 AM
    • 8,994 Posts
    • 16,433 Thanks
    bowlhead99
    Thanks for letting me know. Its an increase of 150% to their current account fees. That hell of increase in profits.
    Originally posted by abdul56
    Or decrease in losses, if people beyond this forum were using them as a savings account as MSE suggest.

    At the moment it costs them 50 each month for a maxed 123 account on instant access, when they could instead get their 20k of funding from overnight LIBOR for 8 a month, or from the 3-month LIBOR market for <10 a month.

    The token 2 a month that the customer pays them is a nominal fee towards this massive business expense, and only covers the extra interest cost (let alone any contribution towards the cashback promotions or actual operating costs of running the current account service) for the customers with average balances under 4k in the accounts.

    While the 'average' person in the country doesn't have 4k to sit around in their current account (because median total household savings are not much more than 5k), it's pretty clear that it can cost a big chunk of money to give promotional rates of interest as a marketing tool. Bank fee structures will eventually work themselves out so that customers who don't value the rates of interest or other services offered, will not buy the "value added" bank accounts.

    This struck me as fairly inevitable, it was only a matter of time before they baited and (current account?) switched enough customers and reduced the benefits of the S123 account.
    Originally posted by edinburgher
    .
    Exactly - it costs money to acquire customers and you can't just give free money to everyone forever. The promotional rates and other things like cashback are just marketing strategy to help them get (or, not lose) customers. There are only so many customers you actually want, given you can easily get money from elsewhere and not everyone is a good target for cross-selling.

    Bit harsh to characterise it as a bait-and-switch though, as it had been running for 3 years without a fee increase even as other interest rates in the market continued to fall.
    Last edited by bowlhead99; 14-09-2015 at 10:25 AM.
    • edinburgher
    • By edinburgher 14th Sep 15, 11:08 AM
    • 11,505 Posts
    • 61,521 Thanks
    edinburgher
    Bit harsh to characterise it as a bait-and-switch though, as it had been running for 3 years without a fee increase even as other interest rates in the market continued to fall.
    I'm probably a bit cynical, can quite easily imagine a few Santander execs sitting around and agreeing a fee increase once market penetration reached x million accounts
  • jamesd
    Its "Easy" to get 12% plus..... with no risk? How.
    Originally posted by roddydogs
    It's investing. There's always some sort of risk when investing. Even though the places I'm mentioning do secured lending, there's still some level of risk. You also need to know that there is no FSCS protection against fraud losses for P2P and for investing in general, no capital value protection except in very limited other situations. But UK P2P is regulated by the FCA now and you can use the FOS. Your key protection is diversifying across different P2P platforms and across different loans at the same platform. If you were stcking in that 5k I mentioned I suggest that you should do it on three different platforms at least.

    Pay a visit to the P2P Independent Forum and look in the sections for: Moneything (currently looking to raise several million at 1.5% a month, a few upcoming loan renewals at 12% scheduled this week also), SavingStream (a steady steam of 12% deals) and Ablrate (anything from 10-14% and perhaps higher at times, currently have a new offer at 11% for waste to energy equipment and you'll find older loans on the secondary market at anything from 7-12% or so).

    There's no way these places can handle the amount of money currently in 123 accounts but for some of the people who are reading this they may be able to handle it. Just don't tell the Mail journalists or MSE or they will be flooded with more money than they can handle at the moment.

    For some other things that you might not have considered, you might find Options: 10% tax free, 7% tax free, 11% taxable, 6% taxable of interest.

    Declaration of interest: it's quite common for me to have bids and/or offers on the Ablrate secondary market so there's a chance that I might make some money if you use that. Or not, just depends what you do and happenstance of whether I have anything at the time you do it.
    Last edited by jamesd; 14-09-2015 at 11:24 AM.
    • Gaffy
    • By Gaffy 14th Sep 15, 11:26 AM
    • 87 Posts
    • 28 Thanks
    Gaffy
    This is going to cost me a bit as I have six 123 accounts. On a full 20k balance the interest rate is now 2.75%, which I guess is still good.
    • apt
    • By apt 14th Sep 15, 11:45 AM
    • 3,087 Posts
    • 1,750 Thanks
    apt
    Still worth it if youve got 20k to spare which is worth 40 pm. Its a pain but cant say im surprised.
    Originally posted by roddydogs
    Not really worth 40 pm as you'd be getting interest on your 20,000 elsewhere. With no mortgage and relatively low utility bills it is no longer worth it for me.
    • cmondynamite
    • By cmondynamite 14th Sep 15, 2:20 PM
    • 69 Posts
    • 31 Thanks
    cmondynamite
    Well I'm glad this discussion has been opened up in the forum today. I have been debating whether to get the 123 account for some time, and I was going to arrange an appointment this week to open one.

    However, if the monthly fee is going up to 5, then this simply isn't for me. I can't get close to having a balance of 20,000, and won't get enough from the other benefits to make it worthwhile.

    Thanks everyone for posting today. Santander is now an account I can now cross off my list of potentials.

    I'm an old fashioned type of person too, and don't believe in paying to bank.
    • colsten
    • By colsten 14th Sep 15, 5:44 PM
    • 10,541 Posts
    • 9,732 Thanks
    colsten
    I'm an old fashioned type of person too, and don't believe in paying to bank.
    Originally posted by cmondynamite
    You have been "paying a bank" for years. May be in the form of not getting any interest on you current account balance, or by paying extra on your mortgage or a loan or an overdraft etc.

    You won't get anything for free.
    • colsten
    • By colsten 14th Sep 15, 5:47 PM
    • 10,541 Posts
    • 9,732 Thanks
    colsten
    This is going to cost me a bit as I have six 123 accounts.
    Originally posted by Gaffy
    Hope they aren't all in your sole name if they are full as this would bust the current FSCS limit, not to talk about the new one.

    I agree with you that 2.75% is still good if you have exhausted all the 3%, 4%, 5% and 6% opportunities and still need a place for more cash.
    • soulsaver
    • By soulsaver 14th Sep 15, 11:39 PM
    • 2,369 Posts
    • 1,159 Thanks
    soulsaver
    I agree with you that 2.75% is still good if you have exhausted all the 3%, 4%, 5% and 6% opportunities and still need a place for more cash.
    Originally posted by colsten
    When I see a post like this from a credible poster I always wonder whether I'm missing something...

    Are these 3%+ bank accounts regular savers?
    Or are you thinking other than bank acs?
    • colsten
    • By colsten 15th Sep 15, 12:01 AM
    • 10,541 Posts
    • 9,732 Thanks
    colsten
    The 6% ones are Regular Savers, and they can boost the 3% you can get from a current account. The 3%, 4% and 5% ones are current accounts. There are also 4% and 5% Regular Savers.
    • Jsscmm
    • By Jsscmm 15th Sep 15, 7:46 AM
    • 147 Posts
    • 67 Thanks
    Jsscmm
    The 6% ones are Regular Savers, and they can boost the 3% you can get from a current account. The 3%, 4% and 5% ones are current accounts. There are also 4% and 5% Regular Savers.
    Originally posted by colsten
    For completeness....

    Current accounts (numbers for 1 person, joint ones possible)

    Nationwide 5% 2.5k 1 year only
    TSB 5% 2k
    Lloyds club 4% 5k
    BoS 3x 3% 5k each
    Tesco 2x 3% 3k each
    Santander.... See this thread

    Regular savings, all need current accounts
    HSBC, first direct, M&S 6%
    TSB 5%
    Lloyds, N&P 4%

    All the above have some hoops such as DDs, payment amounts etc.

    The thread on this board covers the regular savers very well and the current accounts are covered on the budgeting and bank accounts board.
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