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  • FIRST POST
    • ColdIron
    • By ColdIron 14th Jan 20, 9:33 AM
    • 5,580Posts
    • 7,648Thanks
    ColdIron
    Santander to slash 123 account interest and shake up overdrafts
    • #1
    • 14th Jan 20, 9:33 AM
    Santander to slash 123 account interest and shake up overdrafts 14th Jan 20 at 9:33 AM
    Posted on the Budgeting & Bank Accounts board but might be of interest here even though it ceased to be a useful savings account since 2016. Effective 0.7% rate after the 5 monthly fee. Same cashback with the Lite account for 1
    • 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-/
    Last edited by ColdIron; 14-01-2020 at 9:48 AM.
Page 2
    • Superscrooge
    • By Superscrooge 14th Jan 20, 8:43 PM
    • 1,114 Posts
    • 827 Thanks
    Superscrooge
    The Premium Bond prize fund interest rate of 1.4% is now looking very competitive.

    Sadly I expect an announcement that this too will be reduced in the next few weeks.
    • colsten
    • By colsten 14th Jan 20, 9:25 PM
    • 11,691 Posts
    • 11,046 Thanks
    colsten
    When it paid 3% on 40,000 (you could have 2 of them)
    Originally posted by ColdIron
    In its heyday, there were no limits at all. So 5 accounts, 4 of them fully loaded, the 5th used to transfer the monthly interest into, were completely possible if you had the cash.

    I also had a lot fewer wrinkles back then
    • soulsaver
    • By soulsaver 14th Jan 20, 11:18 PM
    • 2,645 Posts
    • 1,330 Thanks
    soulsaver
    Because one person cannot have two accounts. They can have one and a joint one, though
    Originally posted by surreysaver

    2nd half of that statement is correct, see above.
    • vacheron
    • By vacheron 15th Jan 20, 7:36 AM
    • 1,093 Posts
    • 1,073 Thanks
    vacheron
    We had three 123 accounts for about 6 years, two individual accounts and a joint account, each had 20K @ 3%

    I think the fee was 2 per month back then. (so 72 /year in fees to get 1800 interest)

    Then the rate dropped to 1.5 and the fee upped to 5. so we switched the single accounts to First Direct (for the bribe) and kept the joint Santander for the bills and resultant cashback.

    Now we've just ditched the last joint Santander account for Natwest. Better deal and a 150 switching bonus.

    We've also just switched the two First Direct individual accounts to HSBC for the 350 in bribes.

    This is our second switch to HSBC, The new deal requires no HSBC account since the 1st of January 2017 to be eligible and it turns out we ditched them last time round on the 29th of December 2016 !
    Last edited by vacheron; 15-01-2020 at 7:44 AM.
    The rich buy assets.
    The poor only have expenses.
    The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • roddydogs
    • By roddydogs 15th Jan 20, 8:55 AM
    • 6,523 Posts
    • 2,837 Thanks
    roddydogs
    Do we really need 3 threads on this?
    • Ageing Stick Insect
    • By Ageing Stick Insect 15th Jan 20, 11:23 AM
    • 241 Posts
    • 89 Thanks
    Ageing Stick Insect
    I have sent a secure message to Santander saying how disgusted I am both with their decision and the fact I heard about it on Martin's website and not from them. I acccused them on being unprofessional and also pointed out how they continue to pay their Spanish customers 3%.


    I would urge all of you to send a secure message. Maybe their inbox will collapse and that would send a very clear signal of our discontent. Posting here is okay but I'm sure Santander don't monitor this place.


    I'm still chewing over my options. Moving a current account is a real pain with so many DDs and electronic payments setup. My initial thought is to keep the account but with the minimum amount to cover monthly outgoings. That doesn't affect the 1-2-3 payments which will match the 5 charge but they'll get minimum use from my much reduced balance previously kept close to 20K.
    Cheers,
    Ray.


    3.84kWp Panasonic / Solar Edge
    1.44kWp ESE, 1.2kWp SSW, 1.2kWp WNW
    • eskbanker
    • By eskbanker 15th Jan 20, 11:32 AM
    • 12,163 Posts
    • 15,078 Thanks
    eskbanker
    I have sent a secure message to Santander saying how disgusted I am both with their decision and the fact I heard about it on Martin's website and not from them. I acccused them on being unprofessional and also pointed out how they continue to pay their Spanish customers 3%.
    Originally posted by Ageing Stick Insect
    Sounds just like the sort of amusing but pointless rant you'd expect from the character from whom you took your username! Hope it made you feel better....
    • dcweather
    • By dcweather 15th Jan 20, 11:42 AM
    • 30 Posts
    • 5 Thanks
    dcweather
    Really?
    Not great but I feel a big over reaction by Martin and others. Who gets over 5 on a single cashback ? I have just calculated that with my cashback, including my 5 fee I am currently getting 1.8% on my 20,000. After the drop in May this will fall to 1.3%. If I then switch to 123 Lite I will gain the 5 a month and so get 1.6%.
    Can somebody tell me which current account I can switch to and get 1.6% on 20,000 and I will gladly do so?
    • MK62
    • By MK62 15th Jan 20, 11:45 AM
    • 533 Posts
    • 421 Thanks
    MK62
    You do know that 123 Lite pays no interest (and still costs 1pm....for now)......
    • rpstent
    • By rpstent 15th Jan 20, 11:48 AM
    • 1 Posts
    • 0 Thanks
    rpstent
    rpstent
    Can we please ask, if we have a 123 account and wish to switch to a 123 lite account.
    Can we still be eligible for a switch cashback amount ??
    • Ageing Stick Insect
    • By Ageing Stick Insect 15th Jan 20, 11:48 AM
    • 241 Posts
    • 89 Thanks
    Ageing Stick Insect
    Sounds just like the sort of amusing but pointless rant you'd expect from the character from whom you took your username! Hope it made you feel better....
    Originally posted by eskbanker

    I'd like to think it was a measured response more than a rant. Whether it's pointless or not remains to be seen. Maybe they will reconsider if every customer who is annoyed at their decision makes their views known. I feel better for having let them know how I feel rather than staying silent. Long live Basil!
    Cheers,
    Ray.


    3.84kWp Panasonic / Solar Edge
    1.44kWp ESE, 1.2kWp SSW, 1.2kWp WNW
    • dcweather
    • By dcweather 15th Jan 20, 12:00 PM
    • 30 Posts
    • 5 Thanks
    dcweather
    No! Thank you, I didn't realise it didn't pay interest. I assumed it did because it was being suggested to do a straight switch to save. What would be the point of switching as the 4 a month less fees is still less than 1% of 20,000?
    So we would be looking for a current account that has a net interest including cash back of >1.3% which I'm still not sure there is?
    Last edited by dcweather; 15-01-2020 at 12:10 PM.
    • eskbanker
    • By eskbanker 15th Jan 20, 1:18 PM
    • 12,163 Posts
    • 15,078 Thanks
    eskbanker
    I'd like to think it was a measured response more than a rant.
    Originally posted by Ageing Stick Insect
    Possibly - you obviously know exactly what was said and how, but I was simply going by how you chose to precis it here, using unnecessarily emotive language like 'disgusted' and 'unprofessional'. 'Variable rate product has rate varied' doesn't really seem particularly disgusting or unprofessional to me, although that doesn't mean I'm thrilled about it either....

    Whether it's pointless or not remains to be seen. Maybe they will reconsider if every customer who is annoyed at their decision makes their views known. I feel better for having let them know how I feel rather than staying silent.
    Originally posted by Ageing Stick Insect
    I do understand why some people feel better for venting in circumstances like this, but what I don't get is the apparent notion that it might actually make a difference (unless there's any concrete evidence that it's unlawful or in breach of some sort of commitment that may have been overlooked, etc). Surely you don't think that banks reduce interest rates (or increase overdraft rates or other charges) with an expectation that their customers will be delighted, and will be shocked and surprised that people are unhappy about it, to the extent that they'd consider reversing the change?
    • eskbanker
    • By eskbanker 15th Jan 20, 1:21 PM
    • 12,163 Posts
    • 15,078 Thanks
    eskbanker
    Can we please ask, if we have a 123 account and wish to switch to a 123 lite account.
    Can we still be eligible for a switch cashback amount ??
    Originally posted by rpstent
    You can change a full 123 to a 123 Lite by downgrading it, retaining the same account number, but that's not a 'switch' as such (in the usual sense of an account move from one bank to another using the Current Account Switching Service), and in any case they're not offering a switching incentive at the moment anyway....
    • eskbanker
    • By eskbanker 15th Jan 20, 1:25 PM
    • 12,163 Posts
    • 15,078 Thanks
    eskbanker
    No! Thank you, I didn't realise it didn't pay interest. I assumed it did because it was being suggested to do a straight switch to save. What would be the point of switching as the 4 a month less fees is still less than 1% of 20,000?
    So we would be looking for a current account that has a net interest including cash back of >1.3% which I'm still not sure there is?
    Originally posted by dcweather
    When posters compare the net return of a 123 Lite with a full 123, they're typically doing so on the basis that the bulk of the balance earning interest in a full 123 would be moved to a separate easy access savings account (paying 1.35% or similar), leaving the bare minimum in the 123 Lite for DDs, etc. This is obviously less convenient than keeping it all in the one place though....
    • fun4everyone
    • By fun4everyone 15th Jan 20, 1:30 PM
    • 1,974 Posts
    • 3,185 Thanks
    fun4everyone
    I would urge all of you to send a secure message. Maybe their inbox will collapse and that would send a very clear signal of our discontent.
    Originally posted by Ageing Stick Insect
    They already are well aware that dropping the interest rate on a previously market leading account will upset a lot of customers and cause a lot of money to be transferred out/accounts closed. However they won't have to pay nearly as much interest every month. They also already know if they offer a market leading interest rate they would immediately get thousands of applications and huge amounts of deposits - however then they would have to pay a shed load of interest.

    All your message will do is give the person receiving it a good laugh as they send you the template response back. It will then go in the trashcan along with the hundreds of other similar ones they will be receiving today.

    Look after your finances and do whatever is in your best interests. However do realise what is good for you is almost always not good for the banks. Profitable customers for banks are customers that are lousy with their money. Interest rate chasing tarts who pay no fees and take out no crappy products are almost certainly costing banks money.
    • bowlhead99
    • By bowlhead99 15th Jan 20, 2:55 PM
    • 9,804 Posts
    • 17,930 Thanks
    bowlhead99
    Possibly - you obviously know exactly what was said and how, but I was simply going by how you chose to precis it here, using unnecessarily emotive language like 'disgusted' and 'unprofessional'. 'Variable rate product has rate varied' doesn't really seem particularly disgusting or unprofessional to me, although that doesn't mean I'm thrilled about it either....
    Originally posted by eskbanker
    It's all about managing expectations. Maybe there should have been a warning on the product: "As you can see from the "AER Variable" text on or key product information, this product pays a variable rate, so please don't think we are being disgustingly unprofessional if we give you advance notice that we are going to vary it".

    However, customers would probably find that patronising and it still wouldn't stop people bleating that it was unfair if the rate change was down instead of up.

    Whether it's pointless or not remains to be seen. Maybe they will reconsider if every customer who is annoyed at their decision makes their views known
    by Ageing Stick Insect
    Business Development Executive #1:
    What's the feedback from the customers about our reducing the interest rate and cashback available from this product?

    Business Development Executive #2:
    It turns out that customers don't like us reducing the interest rate and cashback available.

    Business Development Executive #1:
    Ok, that's totally in line with expectations.
    • eskbanker
    • By eskbanker 15th Jan 20, 3:02 PM
    • 12,163 Posts
    • 15,078 Thanks
    eskbanker
    If only there was a visual metaphor for the futility of sounding off about this....

    • YorkshireBoy
    • By YorkshireBoy 15th Jan 20, 7:43 PM
    • 31,141 Posts
    • 19,177 Thanks
    YorkshireBoy
    I have just calculated that with my cashback, including my 5 fee I am currently getting 1.8% on my 20,000.
    Originally posted by dcweather
    1.8% on 20,000 is 360

    Interest is 298
    Less 5 fee is 238

    So your cashback must be 122, or 10.16/mth

    Had you moved to Lite last summer, and put your 20K in Marcus, you'd have made 110 from Lite (after the 12 fees) and (20,000 x 1.5% =) 300 from Marcus, so a total of 410. And that 50 extra increases your return to (410 / 20000 =) 2.05% on your 20K. Yes you'll have to a bit more work, but if absolute return is the aim...
    • Stargunner
    • By Stargunner 15th Jan 20, 9:27 PM
    • 15 Posts
    • 4 Thanks
    Stargunner
    Was the 1,5% rate last sumner with Marcus a fixed rate for a year, because the rate is now 1.35% variable. If it was also a variable rate last summer then by the tine you take into account the further reduction in interest rate the difference would be even smaller and hardly worth the extra effort.
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