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Santander Cutting Interest Rates & Rewards again

steelman99
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Santander Cutting Interest Rates & Rewards again

#277289

Postby steelman99 » January 14th, 2020, 10:27 am

See that Santander are now cutting the rewards on their 123 current accounts
The interest rate is going down to 1% PA from May so anyone with less than £6k in the account will pay more in fees then they will get in Interest
Also the rewards are going to be capped at £5 per month per catagory - cant see that affecting a lot of people unless you have top packages on sky/ cable TV & an expensive mobile phone contract , where it would be possible to get over £170 a month bill with the 3% reward and been capped at £5

Certainly wont bother me , and I'm down to the lite account already , so the interest rate wont affect me

but guess a lot of people will be doing their sums again to see if this account is worth bothering with

mutantpoodle
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Re: Santander Cutting Interest Rates & Rewards again

#277397

Postby mutantpoodle » January 14th, 2020, 3:28 pm

rewards capped at £5 a month??

the 'reward on my council tax is much over that...are they saying that is also capped? unless i change and pay monthly??

i realise its early days but they will lose customers i think

also whats happening (or do we not know?) about the regular savers accts??

mc2fool
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Re: Santander Cutting Interest Rates & Rewards again

#277418

Postby mc2fool » January 14th, 2020, 4:45 pm

Well spotted ... I guess we'll get a letter and/or email at some point about it ... or maybe it's already in one that I didn't read :roll: :D

Full details here: https://www.santander.co.uk/personal/current-accounts/123-current-account (although already well described by the OP)

That takes the effective rate for someone with £20K in the account, ignoring cashbacks but account for the £5pm fee, down from 1.2% to 0.7%. Hmmmmm......................

richlist
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Re: Santander Cutting Interest Rates & Rewards again

#277430

Postby richlist » January 14th, 2020, 5:04 pm

I hope they prepare adequately for the £millions that will undoubtedly leave Santander on or before 5th May.

There are better accounts around.......at the moment.....but they may also disappear.

steelman99
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Re: Santander Cutting Interest Rates & Rewards again

#277434

Postby steelman99 » January 14th, 2020, 5:14 pm

mutantpoodle wrote:rewards capped at £5 a month??

the 'reward on my council tax is much over that...are they saying that is also capped? unless i change and pay monthly??

i realise its early days but they will lose customers i think

also whats happening (or do we not know?) about the regular savers accts??

Good point you raised here - I like a lot of others pay the council tax monthly , so 1% of £120 is only £1.20 , but if you pay the whole £1200 up front you would curently get £12 back in one month ,and it looks like that wuld be limited to £5

I also note they refer to 3 catogories , but I have 4 on my statement - Council tax (1%) ,Water (1%) , Gas/ Electric (2%) & Communications (3%) - looks like they are lumping the council tax and water in the same £5

mutantpoodle
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Re: Santander Cutting Interest Rates & Rewards again

#277527

Postby mutantpoodle » January 15th, 2020, 8:47 am

the hthree catagories are % cashback bandings...ie 1% 2% 3%

you very lucky council tax is only £1200 !!

Nimrod103
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Re: Santander Cutting Interest Rates & Rewards again

#277543

Postby Nimrod103 » January 15th, 2020, 9:52 am

I see Martin Lewis has already dropped it from his best buy list of current accounts. He still recommends the Santander 123 Lite account - not sure if it has any advantages. These reductions don't come into effect till May so there is time to review options. I will probably see whether the account costs me to run overall, and if it does I will move elsewhere.

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Re: Santander Cutting Interest Rates & Rewards again

#277569

Postby 77ss » January 15th, 2020, 10:52 am

steelman99 wrote:...

i realise its early days but they will lose customers i think

.....


I am unaffected by the cashback cap - and as near as dammit they pay the monthly fee.

So I will be left with my cash earning me 1%. It was 3% when I opened the account. Are there significantly better places out there?

I suspect that I shall just halve my cash float - putting more into shares. Looking something non-volatile with a 2% or more yield. Maybe its the kick up the pants I need to take a good look at ETF trackers?

mutantpoodle
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Re: Santander Cutting Interest Rates & Rewards again

#277637

Postby mutantpoodle » January 15th, 2020, 3:12 pm

rewards will be capped at £5 per catagory even if qualifying bills (electric/gas/phone etc) have been paid before May 5th

fca2019
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Re: Santander Cutting Interest Rates & Rewards again

#277644

Postby fca2019 » January 15th, 2020, 3:43 pm

They know that the vast majority of people won't switch. People will see little difference between the banks and likely >95% won't make the switch.

Same with Club Lloyds, was 4%, then 2%, then 1.5% now 1%. Was done to pull the punters in, then very few leave when they withhold the dollars.

GeoffF100
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Re: Santander Cutting Interest Rates & Rewards again

#277721

Postby GeoffF100 » January 15th, 2020, 8:55 pm

steelman99 wrote:Certainly wont bother me , and I'm down to the lite account already , so the interest rate wont affect me

Is it possible to downgrade to the Lite account? I will have to check the numbers, but I think that I am better off with the full account, but it is useful to know my options.

I will have to reduce my balance to the minimum. The regulator has changed the rules on overdraft charges, and Santander will just(!) charge 40% p.a. I get an email if I overdraw, so overdrawing by say £1,000 for a day is not a significant risk.

I often move large sums through my account. I usually hit a limit if I try to transfer more than £20K or so in one go via a debit card or Faster Payments. The limits vary and can be unpredictable. The limit is daily for the debit card. I am not sure about Faster Payments.

I often have to split large transactions. Money can hang about in my account for a few days if I have to bale the money out a bucket at a time. Getting 1% on the first £20K is better than nothing.

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Re: Santander Cutting Interest Rates & Rewards again

#277722

Postby paradigm » January 15th, 2020, 9:08 pm

I often have to split large transactions. Money can hang about in my account for a few days if I have to bale the money out a bucket at a time.


I find that telephoning the freephone number given can arrange to transfer large sums in a single faster payment without a charge. Part of the security involves Santander calling back. I have done this several times without an issue.

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Re: Santander Cutting Interest Rates & Rewards again

#277729

Postby steelman99 » January 15th, 2020, 9:35 pm

GeoffF100 wrote:Is it possible to downgrade to the Lite account? I will have to check the numbers, but I think that I am better off with the full account, but it is useful to know my options.


Yes certainly possible to downgrade , just phone them up - thats what I did ,and reduced the balance to around £500

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Re: Santander Cutting Interest Rates & Rewards again

#277833

Postby GeoffF100 » January 16th, 2020, 12:56 pm

Thanks very much to paradigm and steelman99. I have done some investigation.

Am I Getting a Good Deal Now?

I worked out my cashback for the last year. It comes to £37.73. I would have been capped once. My gas and electricity payment for the winter quarter was £5.78. It looks like capping will have a negligible effect on me.

My Marcus account will soon be paying 1.35%, which is 0.15% less than the current 123 rate of 1.5%. On an annualised basis, I gain £30 on a £20K balance.

Currently, the benefits of the 123 just about balance the costs. Nonetheless, the account is very convenient, and has been very reliable.

Comparison of the Revised 123 and 123 Lite Accounts

The cashback appears to be same for both the revised 123 and 123 Lite accounts. The monthly fee is £4 more for the 123 account, which equates to £48 p.a. I could manage my normal monthly average balance down to £1,500. The 123 account would pay me £15 p.a. on that. With more than £20K in my account, I would get £20 p.a. interest. That equates to about £4 per week. It looks reasonable to add another £4 p.a. interest for money in transit, giving a total of £19 interest for the 123 account. The net additional cost for the 123 account is therefore about £29.

Do I get anything for that £29? I get quarterly paper statements. I can just file them away in case I get trouble form HMRC. The monthly PDFs are more of a pain. Apart from that, there do not appear to be any obvious additional benefits for the 123 account. The 123 Lite account appears to win on cost, but I am not likely to get fat on the money saved by downgrading.

What About Santander Select?

Actually, my account is Santander Select. I am not sure how that came about. Perhaps I qualify on the grounds of paying £5,000 per month into the account, on the basis that my average transfers in exceed that figure. Does Santander Select have any tangible additional benefits? I cannot see anything obvious.

GeoffF100
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Re: Santander Cutting Interest Rates & Rewards again

#278080

Postby GeoffF100 » January 17th, 2020, 12:00 pm


toofast2live
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Re: Santander Cutting Interest Rates & Rewards again

#278094

Postby toofast2live » January 17th, 2020, 12:43 pm

Santander Select. Well you get a relationship manager - never used.

You get a 24 hour answer calll centre - never used

Retailer offers there are some good deals here, for example 15% off Morrisons and Waitrose, sometimes. Currently a less useful discount on Butlins, Sky and one other.

GeoffF100
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Re: Santander Cutting Interest Rates & Rewards again

#278135

Postby GeoffF100 » January 17th, 2020, 2:54 pm

Some years ago I rang the Select number and had to wait a long time. The ordinary number responded quickly. They appear to have sorted that out though. I just ring the Select number on my statement and the service seems to be good.

I cannot think of a good reason to talk to my Relationship Manager. I expect that it is just a sales opportunity for Santander.

I was not aware of the retailer offers. I have an Asda down the road and buy most things from them. I buy things from Amazon and Argos occasionally too.

One of the articles I saw said that the Private Banking accounts have the same cashback:

https://www.santanderprivate.co.uk/investing

Again, I am not sure whether there are any tangible benefits to those accounts. I easily qualify on the size of my savings, but I would not want to put them with Santander.

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Re: Santander Cutting Interest Rates & Rewards again

#278250

Postby Maroochydore » January 17th, 2020, 8:40 pm

GeoffF100 wrote:My Marcus account will soon be paying 1.35%, which is 0.15% less than the current 123 rate of 1.5%.

As you already have a Marcus account you can roll over the 1.5% for another year.
I copied and saved a piece from a newspaper about how to do it. Here are the details, sorry can't give you a link as it's now on my PC as an .odt file:
However, if you go into your Marcus account and go to 'Review your savings', you have the option to roll over the bonus rate for another year, meaning you can get 1.5% for another year
If you follow that link, it will give you a page titled 'Your bonus rate options'. It will tell you your current bonus rate and its expiry date, and you can choose to instantly roll that bonus rate over for another 12 months.
While this is incredibly easy to do, it's possible that Goldman Sachs are banking on savers forgetting to do so, or just not doing it.

HTH

paradigm
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Re: Santander Cutting Interest Rates & Rewards again

#278259

Postby paradigm » January 17th, 2020, 9:03 pm

As you already have a Marcus account you can roll over the 1.5% for another year.


Actually tried this last night and a message appeared saying that it was not possible with my savings account.
Has anyone managed to do this recently? Thanks,

paradigm

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Re: Santander Cutting Interest Rates & Rewards again

#278308

Postby GeoffF100 » January 18th, 2020, 7:54 am

I was watching that link closely, and was planning to renew my bonus just before it expired. That way, I thought, I would maximise the term of my new bonus. Unfortunately, Marcus preempted that by removing the link and announcing new interest rates. My bonus has now expired, and 1.5% is not available even to new savers. Bad luck. You win some, you lose some.


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