Santander To Increase 123 Account Fees

[interestrateripoff]

http://www.theguardian.com/money/2015/sep/14/santander-increase-123-account-fees

Santander is to increase the monthly price of its popular 123 account, blaming the rising cost of running a bank for a move which will hit 3.6 million customers.

From January 2016, the cost of the current account will rise from £2 a month to £5, while fees on the linked credit card will go up from £2 to £3.

The 123 account, which was launched three years ago, has been the most popular deal for people moving their current account, attracting hundreds of thousands of customers through the industry switching service. Rival bank Lloyds estimates that Santander now has 20% of the current account market by value.

The 123 account offers cashback on purchases and an interest rate of up to 3% on balances up to £20,000, making it attractive to savers as well as consumers looking for an everyday bank account.

However, Santander said the financial landscape “has changed significantly” since it launched the account, and that to maintain the current interest rates it was necessary to increase the fee.

I wonder if people will start ditching Santander and moving accounts?

[19 year mortgage 8itch]

So a 40% tax payer needs to keep a cash balance of £3333 at all times just to break even and almost £5000 to match the £5 a month that halifax offer?

saw you coming.

[dougless]

When you do the maths its hard to see the appeal of these accounts. A few years ago Lloyds had a good deal on their current account but it didn't last very long.

[rantnrave]

If they had held off until next April, people would be getting interest on their 123 Account tax free and so wouldn't have noticed the impact of the fee increase.

Can't say I'm surprised though - the 123 Account has stood head and shoulders over what everyone else offers for a long time now. There are better interest rates to be had, but the limit of £20k is very generous (relatively)

[This time]

We've got one with about 10k in it, we'll be making 20 quid a month even after the increase. We've also got some money in a Santander ISA which is on a preferential rate of interest because of the 123 account (I think above 3%).

[shindigger]

When you do the maths its hard to see the appeal of these accounts. A few years ago Lloyds had a good deal on their current account but it didn't last very long.

I've had one for a while and ive had nearly a grand out of them in interest.For a £2 monthly fee.

Theyre a no brainer if youve £20k sloshing about.

This is the best interest paying current account due to the £20k interest ceiling. Most of the others are probably as you describe as they only pay interest on about £5k.

Even with the fee at £5 a month i'll be £45 a month clear.

Edited September 15, 2015 by shindigger

[Malditos_Usureros]

Cashback on council tax, utility bills and internet tv/package will almost cover the £5 fee, leaving you the 3% on 20k almost untouched, £40 a month after taxes.

It may still be a good deal if you are fully utilising the cashbacks and keep your account topped up to 20k.