Santander 123 vs Lite, are my sums right?

Purpleheart
Purpleheart Posts: 28 Forumite
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in Savings & investments
I have £10,000 in my 123 account but it's occurred to me that with the yearly £60 fee I'm making £90 in interest, if the money was in an account paying 1% interest then I'd have £100 . Therefore I should change to a Lite account and the best paying savings account I can find.

Can someone just confirm my sums are correct please.
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Comments

  • Rheumatoid
    Rheumatoid Posts: 886 Forumite
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    Purpleheart wrote: »
    I have £10,000 in my 123 account but it's occurred to me that with the yearly £60 fee I'm making £90 in interest, if the money was in an account paying 1% interest then I'd have £100 . Therefore I should change to a Lite account and the best paying savings account I can find.

    Can someone just confirm my sums are correct please.

    That's what quite a few including me seem to be doing and jumping to Marcus
    16 Panel (250W JASolar) 4kWp, facing 170 degrees, 40 degree slope, Solis Inverter. Installed 29/9/2015 - £4700 (Norfolk Solar Together Scheme); 9.6kWh US2000C Pylontech batteries + Solis Inverter installed 12/4/2022 Year target (PVGIS-CMSAF) = 3880kWh - Installer estimate 3452 kWh:Average over 6 years = 4400 :j
  • Purpleheart
    Purpleheart Posts: 28 Forumite
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    Thank you, I now have 7 regular savers on the go so I have less and less savings in my 123.

    I think I shall be another one jumping ship.
  • metrobus
    metrobus Posts: 1,784 Forumite
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    Yes you are correct you are getting in effect 0.9% after the fee.

    Even with £20k we only get 1.2%.

    Switched over to the lite about a year ago put £20k into NS&I bond at 2.2% so £200 a year better off minus the £12 I still pay for the sant lite acc.
    Santander has become a waste of time especially after today when they have announced their regular saver has dropped to 3% with a pathetic £200 a month limit.
  • Zero_Sum
    Zero_Sum Posts: 1,567 Forumite
    I have £10k across 2 x tesco accounts, tsb & nationwide earning me £380 a year in interest. Even before marcus, the full 123 was never worth the extra £4 a month.
  • crumpetman
    crumpetman Posts: 339 Forumite
    Does it not matter how much you will keep in the 123 lite account? If you have over £3k in the 123 account the interest would pay for the extra £4 a month fee compared to the lite account.
  • eskbanker
    eskbanker Posts: 30,820 Forumite
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    crumpetman wrote: »
    Does it not matter how much you will keep in the 123 lite account? If you have over £3k in the 123 account the interest would pay for the extra £4 a month fee compared to the lite account.
    No, that doesn't matter, because in the Lite scenario being discussed, that £3K would be earning 1.5% in a separate easy-access savings account like Marcus, thereby achieving the same interest as a full-function 1-2-3 but without the extra fee.
  • PRAISETHESUN
    PRAISETHESUN Posts: 3,699 Forumite
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    Change to a 123 lite account, use that account for cashback on DDs only, and then transfer the £10k into an easy access savings account - plenty of options paying 1.0-1.5%, or more if you are prepared to lock the funds away for a while. Best of both worlds - and you still keep access to the 5% regular saver
  • RG2015
    RG2015 Posts: 5,896 Forumite
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    PRAISETHESUN wrote: »
    Change to a 123 lite account, use that account for cashback on DDs only, and then transfer the £10k into an easy access savings account - plenty of options paying 1.0-1.5%, or more if you are prepared to lock the funds away for a while. Best of both worlds - and you still keep access to the 5% regular saver
    Sadly, the 5% regular saver has been discontinued with the replacement now only paying 3% for new accounts.
  • crumpetman
    crumpetman Posts: 339 Forumite
    But you are going to have some money sitting in the lite account earning zero interest. If you average higher than £3k then you may as well have the full 123 account as you will be no worse off compared to lite plus Marcus.

    If you have less than £3k in the current account then lite plus Marcus works out better
  • RG2015
    RG2015 Posts: 5,896 Forumite
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    crumpetman wrote: »
    But you are going to have some money sitting in the lite account earning zero interest. If you average higher than £3k then you may as well have the full 123 account as you will be no worse off compared to lite plus Marcus.

    If you have less than £3k in the current account then lite plus Marcus works out better
    £3000 @ 1.49% in Marcus is £44.70 interest per year.

    If the average amount sitting in the 123 account is £300 then we need to look at the income and costs for an average balance of £3,300 in it.

    £3,300 @ 1.49% is £49.17 less the annual fee of £48.00 (£5 per month less £1 per month).

    Which is better, £1.17 per year or £44.70 per year?
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