Remember when the Santander 123 current account was awesome? I do. That’s why I switched to it a number of years ago. Things are changing though and I’m considering switching my Santander 123 account to another bank or building society. Change is sometimes good but in this case change is bad.
Ain’t What It Used To Be
When the Santander 123 current account began you paid £2 a month to use it, got 3% on up to £20000, meaning you could earning £600 interest per year and it was generally praised as being the best current account out there. That was the reason I joined. It had great interest rates and your money was making some real money. Then some changes kicked in.
What Changed?
Things changed a couple of years ago when it cut it’s interest rate to 1.5%, increased it’s monthly fee to £5. This is the current set up. Along with a variety of percentages of cashback. This includes 1% on water/council tax and Santander mortgages, 2% on gas & electric bills and 3% on mobile, landlines, TV supplier and broadband payments. My payments from this last month were £17.19, including interest. So after the £5 monthly fee, £12.19. Since joining I have earned over £1200 from all these bonuses.
What’s The New Numbers?
The Santander 123 account is changing again and it’s bad news for customers. Firstly the interest rate is being slashed by a third to just 1%. Those with £20k in their accounts when the 123 accounts began in 2012 would have been making £600, now just £200. Secondly the cashback on the three groups of household bills will be capped at £5 each. I will probably slightly lose out on the cashback in the 1% group as we get almost the full £5 back on our mortgage, so water and council tax cashback won’t be seen.
So What Can You Do?
If you don’t like the bank you’re with, for whatever reason, you have to vote with your feet and walk. With the increase in overdraft fees across the board turning to other banks looks even less attractive. There are some ways of benefiting though. Use the current account switching service and find another bank you’re happy to join. Whilst they might not have much more in terms of interest or cashback, some of them actually pay you to join so you can get a mini cash boost for simply jumping ship and joining a new bank.
Cash Conclusion
The Ant & Dec fronted Santander have been great for me over the last five or six years but I think that it’s about time to vote with those feet of mine. I’m going to barely make any money on the few savings I have and being self employed, if I have to dip into them at any point I’ll make even less. I’ve written before about there being no loyalty in the world of TV and broadband suppliers, seemingly the world of banking is also going the same way. We get comfortable with what we have and don’t change our ways, perhaps for fear of the unknown. It’s time to break out of that mold. If you have a Santander 123 account what will you be doing? Let me know over on Twitter, especially if you have any alternative banking recommendations.
