Santander 123

[Batshittery]

I am thinking about opening a Santander 123 account to obtain cash back on the bills I pay. I'm trying to decide if it is worth paying £5 a month or to have the Lite account and only pay £1.

Does anyone know if the cash back applies to paying monthly for Now TV and Netflix? I have tried searching their website but having no luck.

Thank you

We have this account, but I don't know the answer to that either. But the amount you would get from those is quite small and probably not worth factoring into the equation eg £20 pm x 2% = 40 pence.

Unless your bills are tiny, you'll probably get enough cashback to make back the £5 monthly fee plus you get access to the 1.5% interest on up to £20k, which is excellent in the current climate. Plus there's also the 2.75% regular saver, which is also pretty much unbeatable.

We get between £4 and £4.50 pm in cashback, but are mainly in it for the interest and our bills are much lower than average (band A council tax, total mobile phone bills under £20 pm, no pay TV, always a very low broadband deal).

Thank you Barbara

Hi, we have the lite account as we don’t keep spare money in it as it’s our main current account. We earn £17 in cash back as we also use other offers which you can select through the app. So after the £1 fee we are £16 up each month, it’s not much but it covers two weeks of after school club for my daughter.
My dad uses the standard 123 but I know he has the full allowance in there so it’s very good for interest.
Hope that helps

Quick bit of advice - make sure you keep track of your direct debits (you need 2 active ones) as I used to have DS's phone as one of mine, but we transferred it to his name when he went to Uni and I didn't remember it was fulfilling part of the Santander criteria until I noticed a couple of months later I'd stopped earning the interest .

I moved from the Normal account to the Lite one for reasons I can't recall (but stacked up financially).

Can confirm both Netflix nor Now tv are NOT cashback-able. Sometime to do with the fine print of how the payment is made (I asked Santander)

I make about a tenner a month on bill cash back - a whack of it because I also have a mortgage with Santander and pay it from that account.

No those payments don't count. So for me it's water, elect/gas and something else not sure think it's my Talk talk broadband. I have lite and it makes me about £4 a month. Not enough going in/out to get benefit of full.

Thank you all for your replies.

I don't have any mortgage so it would just be on bills. It seems my best bet will be to opt for the 123 Lite as my bills aren't big enough to merit paying £5 a month, especially as Now TV and Netflix won't count. Any remaining balance, I would transfer out to a savings account anyway, so I don't need the interest payments.
Thanks again

Barmaid I think £16 a month is a cracking profit.

the current interest rate of 1.5% is one of the best you can get. Make the most of it - new rules in consultation will mean that all interest rates will be peanuts in a year, not just the ones where people aren't paying attention.

I have a 123 £5 a month account. I normally make about £8 a month, including interest as well as the cashback from direct debits. I also have a Santander mortgage. As BarbaraofSeville points out, you get a better rate on the regular saver.

I don’t have netflix but wonder if it doesn’t get counted because it’s paid by continuous card authority, not direct debit?

I was just going to say, as above, that Netflix is a card payment not direct debit, so presumably doesn't count towards your required number of direct debits either.

If you are ever in need of an extra direct debit, you can set one up with your PayPal account without actually needing to be transferring any money.

Thanks for the additional replies. I don't use PayPal but have some direct debits with another bank I can transfer.

@Batshittery this may make your decision easier. I'm certainly going to consider whether the reduced bird in hand is still better than two in the bush:

www.moneysavingexpert.com/news/2020/01/santander-to-slash-savings-rates-and-shake-up-overdrafts---what-/

Hi Buzz. Yes I saw that on MSE yesterday. I’ve decided to hold fire. For what I’d make, it isn’t worth moving direct debits around. I’m also wary that the lite account will soon be amended.
Thanks

Yes, I've seen that news now. Not surprised really as the 1.5% was market leading, especially if you profitted from the cashback as well.

Plus various other things in the banking industry like continuation of the low base rate and rumours that it could be cut further, reduction in fees charged for processing credit and debit card payments and new rules for people in persistent debt meaning that providers can't just keep charging people interest on balances that aren't going down for ever and ever mean that, while we may hang on to free in credit banking, all these little perks might be significantly reduced or dry up completely.

The Santander rate doesn't drop until early May, so I'm going to give it a few months to see what other changes arise and then maybe think about switching again.

Shame as we used our 123 account as a combined current and savings account and it worked really well, but we're going to have to shift the savings elsewhere as it's not really worth paying the £5 fee if it's not a gateway to a decent interest rate - as I've said above, our cashback falls a little short of the £5, but it was worth it for the interest on current account and short/medium term savings.

@BarbaraofSeville Just been looking at different savings account and they are all quite rubbish! On the new rate i will be earning £16 per month interest and just under £5 on cash back. Still better than a lot of banks.

I'm not happy to be right about this.

mutterings now of dropping interest rate due to an apparent drop in inflation (yeah, right..) so it will get even worse.

Are the new rules to do with all accounts paying the same rate? So you can't get a rate of 1.5% on a short term account, which then drops to 0.5%, so they'll just make all the accounts 0.5%?

Like when they said that they couldn't charge different rates for unauthorised and authorised overdrafts, so all overdrafts are now moving towards 40%(!)

Like when they (quite rightly) criticised higher gas and electricity tariffs, especially the most expensive prepay tariffs, generally used by the poorest in society. Guess what, they simply withdrew the cheapest tariffs.

I don't suppose I can complain. I've made thousands over the years by exploiting the deals, subsidised by people with less time or inclination. Being in a situation where you can borrow money at 0% or 1% with no fees and then save it with the same bank at up to 5% is never going to be sustainable.

I wonder what will happen to premium bonds? The prize fund is currently 1.4%, but I believe that there are rules in place that prevent them offering market leading rates, because it's the government and they have too much advantage. Do we expect the rate on those to drop too?

I read some musing on a financial site that we could end up with 0% interest by the end of the year. It's a glum time for savers

One tiny advantage of the Santander 123 account is that the interest is paid monthly, so is compounded, which, I think, is unlike a savings account, when the simple interest is added at the end of the year/term. I have had a 123 account for years, and done very well out of it, but will hold fire until we know what the financial landscape looks like in May when the rate is due to change.

We have the Lite one and a Santander mortgage and get around £17 per month plus extras if we use the retailer offers. I don't know what you get for the £5 a month that we need?

@Noeuf Bank interest :)

Oh ok thank you

@Noeuf on the £5 account it paid a good rate of interest on savings up to £20K. I think it was 1.5% but this is being changed in May. I think many will then switch to the Lite account and move their savings. I missed the boat