Santander’s 123 Current Account fees have increased by 150%
Santander’s 123 Current Account fees increased by 150% on Monday 11th, from £2 per month to £5 per month, so account users should now consider how they use the account, to ensure they're still getting a good deal and not paying more for the account than they get out of it.
While the increase is not a surprise – it was first announced back in September – it is worth highlighting again that this has happened, especially as the fee is going up by 150%.
This means that across the year instead of paying £24 for the benefits of the current account, you will be paying £60, so you may need to fully utilise the cashback facility, in order to further mitigate the fee.
The account pays 1% cashback on water bills, council tax and Santander mortgage payments, 2% on gas and electricity bills and 3% on mobile and home phone bills, broadband and paid for TV packages.
In addition, you receive 1% AER on balances over £1,000, 2% AER on balances over £2,000 and 3% AER on balances between £3,000 and £20,000.
What should not be forgotten is that the account pays a healthy 3% AER interest (before tax) on balances between £3,000 and £20,000, so for savers it could still worthwhile. But as always, you need to make sure that you will be gaining more from the account than you will pay for it.
If you have a balance of, say, £5,000 then you would receive £150 a year in interest before tax. If you took away the £60 fee you will pay for the account, you will still be left with £90 in interest, which is equivalent to 1.80% AER in interest for a year. If you are a taxpayer you need to do your sums, as if you don't the use the cashback facility you could pay more in fees than you earn in interest. Call one of our advisers for help on 0800 321 3581.
Given that the very best rate available on an easy-access savings account is 1.65% AER with RCI’s Freedom Savings Account, this gives you an idea of why the Santander account should not be ignored for savers looking to improve their interest rates.
Other accounts to consider: