The Lemon Fool

Like a lot of people who use the santander 123 account , I keep the balance near the £20k limit for the interest , but with £5 a month charge and the increase in interest rates elsewhere , has it now lost its usefulness?

Assuming you keep £20k in the account for the full month , you get £300 per year interest , but pay £60 in fees , so net £240.

The best instant access savings account now pays 1.3% or £260 per year interest so with the santander account your actually £20 per year worse off

I know there's the cash back on bills with santander , but with the santander light account , you get the cashback with a £1 per month charge ,

Ok - your only £8 per a year better off now with the savings account over santander 123 lite , but if interest rates keep creeping up , its something to watch out for

Then there's the Nat West Reward account - which can be better than santander light depending on your bills

I already had a Natwest current account, so 6 months ago I closed my Santander 123, moved the cash to a different savings account I have that pays 1.25%, changed my Natwest account to a Reward account (£2 monthly fee) and took the Natwest Reward Credit Card too (no fee if you have the Reward Current Account). I get loads more in rewards now than I used to with Santander and no £5 fee.

I think Santander 123 has lost most of its usefulness.

Not just the 123.

They also reduced the rate on ISA well below the competition.

Too much cheap money still around from central banks.
https://www.weforum.org/agenda/2017/06/ ... eap-money/

The policy that really is robbing the generation that has saved.

I average about £2 per month cash back, so the net cost is £5 - £2 = £3 per month, or £36 per year. The additional interest of £20K is £40 pa, so I roughly break even. The advantage is that I always have £20K for immediate use. I do not have to transfer money in first. Santander (and Abbey before them) have been reliable. Most of other big banks have horror stories. I do not expect Santander is immune though. It is only a matter of time before they have a disaster too.

There is the linked online saver (that you need to open in branch) £200 month @ 5% (did drop to 3% then returned to 5%)

I've been thinking about moving to the lite version and sticking the cash in a global equity fund.

I've got an offset mortgage to draw upon if needed.

steelman99 wrote:......

Assuming you keep £20k in the account for the full month , you get £300 per year interest , but pay £60 in fees , so net £240.

The best instant access savings account now pays 1.3% or £260 per year interest so with the santander account your actually £20 per year worse off ....

One has to do the sums - and set up the direct debits. I average £3.50 a month cashback, so my net figure is £282. £22 a year better off than in your 1.3% account.

Not what it was when the interest rate was 3%, sure, but it still works for me - and I find having a £20K slush fund useful.

Having read this thread, I have mixed feelings about the fact that my average cashback more than offsets the £5 monthly fee! Still, given my apparently profligate lifestyle, the account still works for me