The Lemon Fool

E-mail received today saying they’re reducing the interesting rate rate to 0.3% (from 0.6%) and monthly costs to £4 (from £3) on my 123 account. Still get the cash back but the returns on cash really are pathetic. I’m not a rate tart and have household bills coming out of the account by DD but I’ll have a look round.

Best wishes,

Steve

Nothing to stop you looking around.
But, when interest rates are this low it's not normally worth the trip changing accounts. Where else are you going to get 0.3% on up to £20K of instant access cash in a current account ? There are other accounts paying 0.5% but not on up to £20K.

The account will still be massively competitive.

You’re right that it’s hardly worth the trouble but for almost no trouble I can move most of the Santander cash to Marcus and gain a small uplift. In absolute amounts it’s trivial ...

Best wishes,

Steve

Steveam wrote:...and monthly costs to £4 (from £3) on my 123 account.

I believe the monthly fee is reducing rather than increasing, see here:

https://www.santander.co.uk/about-santa ... erest-rate

Steveam wrote:E-mail received today saying they’re reducing the interesting rate rate to 0.3% (from 0.6%) and monthly costs to £4 (from £3) on my 123 account. Still get the cash back but the returns on cash really are pathetic. I’m not a rate tart and have household bills coming out of the account by DD but I’ll have a look round.

Best wishes,

Steve

You can still get the cashback on the lite version - 0% interest and fee £2 per month.

I moved to the lite version a while ago , and since they reduced the tv/ phone cashback to 1% its only just covering the £2 cost (think Im making about 60p per month) and in the 2 months I dont pay council tax Im loosing money. They increased the water to 3% bit thats a lot less than the phone / TV 3%
over the year I think im making about £5 a year after costs

just waiting for someone to have an offer of £100 or so for opening an account then it will move

steelman99 wrote:... in the 2 months I dont pay council tax Im loosing money.

You can change your council tax to be paid over 12 months instead of the usual 10. My council lets you do that online, and I did so a few years back precisely for a Santander 123 a/c.

(I expect most councils will be like mine in only letting you set up 12 month billing on a whole tax year basis, so if you set it up now it'd start in April.)

mc2fool wrote:

steelman99 wrote:... in the 2 months I dont pay council tax Im loosing money.

You can change your council tax to be paid over 12 months instead of the usual 10. My council lets you do that online, and I did so a few years back precisely for a Santander 123 a/c.

I'm not sure I understand the logic of that, surely the total cashback paid over the year will be the same???

Stompa wrote:

mc2fool wrote:

steelman99 wrote:... in the 2 months I dont pay council tax Im loosing money.

You can change your council tax to be paid over 12 months instead of the usual 10. My council lets you do that online, and I did so a few years back precisely for a Santander 123 a/c.

I'm not sure I understand the logic of that, surely the total cashback paid over the year will be the same???

no cash back on council tax is 1%...but that is liited to £5 in any one month
so council tax of £2000 (if you very lucky) gets £5
but
if you pay it monthly at +/- £200 a month you get £2 each month as cash back......so in example you get £24...not the £5

richlist wrote:Nothing to stop you looking around.
But, when interest rates are this low it's not normally worth the trip changing accounts. Where else are you going to get 0.3% on up to £20K of instant access cash in a current account ? There are other accounts paying 0.5% but not on up to £20K.

The account will still be massively competitive.

I'm not convinced that an effective rate of 0.06%pa ignoring cashback is that competitive. The headline rate gives you £60 interest in a full year if your balance never drops below £20K. You pay £48 in monthly fees. So that's a net £12 in the full year.

Admittedly the amount to be gained elsewhere is still small in absolute terms.

Clearly it's not going to work for everyone but.......

My £5 a month charge is more than covered by cashback payments for utilities.
So I'm currently getting the full 0.6% interest on my balance + a bit more.

Stompa wrote:

mc2fool wrote:

steelman99 wrote:... in the 2 months I dont pay council tax Im loosing money.

You can change your council tax to be paid over 12 months instead of the usual 10. My council lets you do that online, and I did so a few years back precisely for a Santander 123 a/c.

I'm not sure I understand the logic of that, surely the total cashback paid over the year will be the same???

Oh yeah, you're right. I did it so it qualifies as one of the required DDs each month. It was quite a while ago and I'd forgotten the exact motivation. I did the same with water and TV license (it's not my only current a/c).

mc2fool wrote:I did it so it qualifies as one of the required DDs each month. It was quite a while ago and I'd forgotten the exact motivation. I did the same with water and TV license (it's not my only current a/c).

AFAIK the Santander 123 has only ever required 2 active DDs, they don't need to be triggered every month. I used to have a second account that just had 2 DDs, each of which triggered once a year, and it was just fine.

So I don't think you actually needed to do that!

Stompa wrote:

mc2fool wrote:I did it so it qualifies as one of the required DDs each month. It was quite a while ago and I'd forgotten the exact motivation. I did the same with water and TV license (it's not my only current a/c).

AFAIK the Santander 123 has only ever required 2 active DDs, they don't need to be triggered every month. I used to have a second account that just had 2 DDs, each of which triggered once a year, and it was just fine.

Well, I guess I'd interpreted "active" as being used each month, as some other banks require, e.g. https://www.bankofscotland.co.uk/bankaccounts/vantage.html. But it doesn't matter, when I did it I also did the same with DDs from other accounts that don't have a DD requirement, so I'm happy anyway ...