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  • FIRST POST
    • ColdIron
    • By ColdIron 14th Jan 20, 9:20 AM
    • 5,579Posts
    • 7,646Thanks
    ColdIron
    Santander to slash 123 account interest and shake up overdrafts
    • #1
    • 14th Jan 20, 9:20 AM
    Santander to slash 123 account interest and shake up overdrafts 14th Jan 20 at 9:20 AM
    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-/
Page 3
    • colsten
    • By colsten 14th Jan 20, 7:51 PM
    • 11,661 Posts
    • 11,036 Thanks
    colsten
    Closest "clean" interest rate. 1%. No fee, but no cashback.
    Originally posted by Neil Jones
    Well that is not quite true. Lloyds and BoS pay the same on up to £4K, and more if you have another K to park in the account. LLoyds fee is easily avoidable, and BOS has no fee. There's also still the 3% TSB though that might only last a short while longer, and interest gets only paid on up to £1,500.
    • surreysaver
    • By surreysaver 14th Jan 20, 7:57 PM
    • 2,981 Posts
    • 1,655 Thanks
    surreysaver
    Funny how they're making the change on a Tuesday. Why not the Monday?
    I consider myself to be a male feminist. Is that allowed?
    • Fingerbobs
    • By Fingerbobs 14th Jan 20, 8:46 PM
    • 854 Posts
    • 369 Thanks
    Fingerbobs
    Now that Club Lloyds is an effective 1.2% on a full balance (coincidentally the same as the pre-drop 123 after the £5 fee) I'm getting 1.2% on £5k and 1.5% on £15k (for now). A lot better than the effective 0.7% on the new 123. I've been running this for nearly 2 years and it's nicely bedded in
    Originally posted by ColdIron
    Just to clarify, the Santander "effective" interest rate after taking the £5 fee, but not cashback, into consideration is 1.2% only if you maintain a balance of exactly £20,000 in the account. The lower the balance, the lower the "effective" interest rate. A balance of £4,000 effectively earns zero interest, and anything less it'll be costing you money (ignoring cashback).

    People throw this 1.2% figure around a lot, but it's not correct in practice.
    • colsten
    • By colsten 14th Jan 20, 9:10 PM
    • 11,661 Posts
    • 11,036 Thanks
    colsten
    Just to clarify, the Santander "effective" interest rate after taking the £5 fee, but not cashback, into consideration is 1.2% only if you maintain a balance of exactly £20,000 in the account. The lower the balance, the lower the "effective" interest rate. A balance of £4,000 effectively earns zero interest, and anything less it'll be costing you money (ignoring cashback).

    People throw this 1.2% figure around a lot, but it's not correct in practice.
    Originally posted by Fingerbobs
    It's 1.5% for me, regardless of how much I have in the account, as my cashback always reliably pays the account fee. Yes, I know I would get the same amount of cashback for £4/mth less but then I'd get 0% interest on some fairly large amounts and/or would have to manually refill several times a month, and still I'd be at permanent risk of going overdrawn, particularly when the monthly credit card bills hit. With the new overdraft charges, avoiding overdrafts becomes even more important to me. I'll continue to use the full-fat 123 when they drop the rate, albeit with a permanently reduced max balance.
    • ffacoffipawb
    • By ffacoffipawb 14th Jan 20, 9:15 PM
    • 3,027 Posts
    • 2,169 Thanks
    ffacoffipawb
    Funny how they're making the change on a Tuesday. Why not the Monday?
    Originally posted by surreysaver
    Because they thought Monday 4th May was a bank holiday. It should be one, but the bank holiday has been moved to Friday 8th May.
    Retired: Financial Independence achieved in June 2019.

    Cofiwch Dryweryn
    • Cmdr_Bond
    • By Cmdr_Bond 14th Jan 20, 9:49 PM
    • 579 Posts
    • 767 Thanks
    Cmdr_Bond
    Like many others, our full-fat 123 is still a relatively good deal.
    I'm not interested in chasing switching bonus, just a good-enough long term rate.

    With the current account (still likely to yield £20pm in cash-back and interest) we have 2x regular savers at 3%, plus mini123 for each kid in 3% territory.
    Originally posted by YBR
    Careful on the cash back, this is what's in the small print


    Cash back is a monthly cash reward that we'll pay directly into your 1|2|3 Current Account, as long as you meet the ongoing eligibility criteria that we've set out in Conditions 4 and 5.

    From 5 May 2020, a cap of £5 will apply on the amount of cashback that is paid on each of the eligible percentage cash back categories. This means that you can earn up to £15 in cashback in any one month. Depending on your statement date this may mean that cashback is capped on Direct Debits which you've paid in April 2020.

    Payments for financial or additional services (such as servicing and maintenance arrangements, or warranties) from organisations in eligible cashback categories won't qualify for cashback.

    You can only earn cashback on eligible Direct Debit payments for your home in the UK as long as it's only for your comestic use Direct Debit payments for commercial purposes don't qualify for cash back. The cash back is calculated and given by us (Santander UK plc) and not the organisation that receives the Direct Debit payment. This cashback doesn't affect any other offers that these organisations may supply.

    Cashback is paid at the end of each statement period, based on the date your Direct Debits are collected by the company you are paying.

    We'll oniy pay cashback on the net amount of the Direct Debit payment. For example, if you're refunded or part-refunded your Direct Debit payment, we'll pay cash back on the net amount that you actually paid to the organisation.

    You'll need to ensure that Direct Debits are active on your account when we calculate your cashback. We'll credit the total amount of cashback you earn in each statement period to your account. Cashback is based on the date in which Direct Debits are collected. For reasons outside of our control, Direct Debits collection dates may vary which means, at times, a Direct Debit may not be collected withn a statement period. This may have an impact on your ability to earn cashback for that month due to this being capped in the following month. You can check your statement or visit Online Banking to find out which date we pay your cashback and can consider changing your statement date, or the date the company collects your Direct Debit to minimise the risk of this happening.
    by 5.2 Cashback amount and categories
    Not as green as I am cabbage looking
    • MDMD
    • By MDMD 14th Jan 20, 10:24 PM
    • 494 Posts
    • 392 Thanks
    MDMD
    I wonder what the likelihood is of them doing another switch offer next year if a load of people close their accounts in May?

    I’m running low on Amazon credit.....
    • soulsaver
    • By soulsaver 14th Jan 20, 10:57 PM
    • 2,644 Posts
    • 1,330 Thanks
    soulsaver
    I wonder what the likelihood is of them doing another switch offer next year if a load of people close their accounts in May?

    Iím running low on Amazon credit.....
    Originally posted by MDMD
    Maybe this is because of the bonanza switch cost?
    • johnoz
    • By johnoz 14th Jan 20, 11:16 PM
    • 133 Posts
    • 45 Thanks
    johnoz
    You folks who have mentioned moving from “full-fat” 123 to 123-Lite (and vice versa) ... have you found an “automatic” way to do this (like the Current Account Switching Service) or did you need to do everything manually as both accounts are at the same bank? Thanks in advance.
    • soulsaver
    • By soulsaver 14th Jan 20, 11:21 PM
    • 2,644 Posts
    • 1,330 Thanks
    soulsaver
    You folks who have mentioned moving from “full-fat” 123 to 123-Lite (and vice versa) ... have you found an “automatic” way to do this (like the Current Account Switching Service) or did you need to do everything manually as both accounts are at the same bank? Thanks in advance.
    Originally posted by johnoz
    It's the same account, same sort code & ac number, just downgraded. No need to move anything.
    • schiff
    • By schiff 14th Jan 20, 11:46 PM
    • 18,798 Posts
    • 10,194 Thanks
    schiff
    It's the same account, same sort code & ac number, just downgraded. No need to move anything.
    Originally posted by soulsaver
    I suppose you could request it via secure message?
    • Neil Jones
    • By Neil Jones 14th Jan 20, 11:55 PM
    • 3,286 Posts
    • 2,409 Thanks
    Neil Jones
    I suppose you could request it via secure message?
    Originally posted by schiff
    There is a link on the right hand side when you're logged in, "Upgrade current account". Use that.
    • ColdIron
    • By ColdIron 15th Jan 20, 8:46 AM
    • 5,579 Posts
    • 7,646 Thanks
    ColdIron
    Has MSE - in the person of ColdIron - coined a new epithet in 'full fat 123'?
    Originally posted by schiff
    I think that the account going forward from May should be know as the Semi-Skimmed 123
    • schiff
    • By schiff 15th Jan 20, 12:26 PM
    • 18,798 Posts
    • 10,194 Thanks
    schiff
    Notified of a secure message from TSB this morning and my heart sank. But it was only my monthly statement.
    • fozz010
    • By fozz010 15th Jan 20, 2:33 PM
    • 6 Posts
    • 0 Thanks
    fozz010
    Any advice on what to do with my 10k in Santander 123? I have a mortgage with them as well and also a regular saver (£200 a month)
    Thanks in advance.
    • fun4everyone
    • By fun4everyone 15th Jan 20, 2:36 PM
    • 1,970 Posts
    • 3,179 Thanks
    fun4everyone
    Any advice on what to do with my 10k in Santander 123? I have a mortgage with them as well and also a regular saver (£200 a month)
    Thanks in advance.
    Originally posted by fozz010
    Turn it to lite and transfer your £10k to Marcus (or similar competitive easy access account). Keep only enough in your 123 lite to pay the bills/mortgage and whatever day to day needs you have. Continue to enjoy cashback on bills/mortgage there and interest on the £10k in Marcus plus the regular saver on Santander (you will still qualify for it with Lite). You will also now only pay £1 per month for your account instead of £5.

    Don't worry about changing to Lite, account no and sort code stays the same and nothing at all is disturbed.
    • janbeno
    • By janbeno 15th Jan 20, 2:38 PM
    • 21 Posts
    • 6 Thanks
    janbeno
    Typical, I changed my S123 from Lite to Standard last week to get the 1.5%. I will revert back in May and find somewhere else for my 20K.
    Originally posted by Sad_Dad
    We are in a 123 full at mo, did a workup and as we are getting £6.75 cashback, we will probably go to the Lite version at least we will be £5.75 up. I will move our £20k to a higher interest paying savings account.
    • janbeno
    • By janbeno 15th Jan 20, 2:44 PM
    • 21 Posts
    • 6 Thanks
    janbeno
    Turn it to lite and transfer your £10k to Marcus (or similar competitive easy access account). Keep only enough in your 123 lite to pay the bills/mortgage and whatever day to day needs you have. Continue to enjoy cashback on bills/mortgage there and interest on the £10k in Marcus plus the regular saver on Santander (you will still qualify for it with Lite). You will also now only pay £1 per month for your account instead of £5.

    Don't worry about changing to Lite, account no and sort code stays the same and nothing at all is disturbed.
    Originally posted by fun4everyone
    Quick point. Working out when to switch to Lite so I don't incur 2 charges. When's the best time to switch?
    • JimmyTheWig
    • By JimmyTheWig 15th Jan 20, 2:59 PM
    • 11,916 Posts
    • 11,436 Thanks
    JimmyTheWig
    It's 1.5% for me, regardless of how much I have in the account, as my cashback always reliably pays the account fee. Yes, I know I would get the same amount of cashback for £4/mth less but then I'd get 0% interest on some fairly large amounts and/or would have to manually refill several times a month, and still I'd be at permanent risk of going overdrawn, particularly when the monthly credit card bills hit. With the new overdraft charges, avoiding overdrafts becomes even more important to me. I'll continue to use the full-fat 123 when they drop the rate, albeit with a permanently reduced max balance.
    Originally posted by colsten
    Yes, it's definitely convenient having a current account that you can guarantee having money to make any payment. Am now in the process of deciding if it is worth it.
    • fun4everyone
    • By fun4everyone 15th Jan 20, 3:01 PM
    • 1,970 Posts
    • 3,179 Thanks
    fun4everyone
    Quick point. Working out when to switch to Lite so I don't incur 2 charges. When's the best time to switch?
    Originally posted by janbeno
    That is a good question, you could phone and ask. I doubt you will incur two charges (from my personal experience of how it works) but there might be an optimal date to do the switch.

    I did this switch about a year ago, they change the monthly birthday date of your account to the day you change to lite (IE if you previously got paid interest/paid the fee on the 20th but switch to lite on the 4th your accounts monthly birthday now becomes the 4th). I got given the interest I was due up to the date I changed but did not pay any account fee until a month after I moved to lite (when I was debited £1 instead of £5). So effectively between the 20th and 4th I got the account for free. If that is all correct I should have made the change a couple of days before the monthly birthday of the account around the 18th or 19th. Best to phone and ask though.
    Last edited by fun4everyone; 15-01-2020 at 3:27 PM.
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