Santander 123 Current Account Reviews: Cashback and Interest Rates
Did you know Santander’s 123 Current Account was launched in 2012? It once offered a 3% interest rate on balances up to £20,000. This account changed the game in personal banking, combining cashback with high interest rates.
Today, the rates have changed, but the Santander 123 Current Account remains popular. It offers cashback on household bills and interest on balances. This makes it a standout choice in personal banking.
But how does it compare to newer accounts? Let’s look closer at its features, benefits, and what customers say. This will help you decide if it’s right for you.
Key Takeaways
- Santander 123 Current Account offers cashback on household bills
- Account pays 2% interest on balances up to £20,000
- Monthly fee of £4 applies
- Cashback is tiered at 1%, 2%, and 3% on different bill categories
- Customer reviews highlight satisfaction with cashback and interest rates
- Account competes with newer offerings like Santander Edge Up
- 55% of reviews give the account a 5-star rating
Introduction to Santander 123 Current Account
The Santander 123 Current Account is designed for UK residents. It offers cashback rewards and competitive interest rates. This makes it a great choice for those wanting to get the most from their money.
Overview of Account Features
The Santander 123 Current Account has many key features. These are aimed at rewarding customers for their spending and saving:
- Cashback on household bills
- Interest on account balances
- Mobile and online banking access
- Contactless debit card
Target Audience and Eligibility Criteria
This account is for people aged 18 or older living in the UK. To qualify, applicants must:
- Be UK residents
- Be at least 18 years old
- Commit to depositing £500 monthly
- Set up and maintain two active Direct Debits
Account Fees and Requirements
To keep the Santander 123 Current Account, customers need to know a few things:
| Requirement | Details |
|---|---|
| Monthly Fee | £4 |
| Minimum Monthly Deposit | £500 |
| Direct Debits | Two active |
| Statements | Paperless |
| Interest Rate | 2% AER on balances up to £20,000 |
By following these requirements, account holders can enjoy the cashback and interest benefits of the Santander 123 Current Account.
Cashback Rewards on Household Bills
The Santander 123 Current Account offers a great cashback program on household bills. This helps customers save money on their regular expenses. They also get the benefits of a full banking solution.
Cashback Tiers Breakdown
The account has a tiered cashback structure. It rewards customers based on different bill categories:
- 1% cashback on council tax, mobile and home phone bills, broadband, and TV packages
- 2% cashback on gas and electricity bills
- 3% cashback on water bills
Eligible Bill Categories
Santander’s cashback rewards cover many household bills. Customers can earn cashback on essential services like utilities, telecommunications, and local taxes. This ensures account holders can save money across various bill categories.
Cashback Caps and Limitations
While the cashback rewards are generous, there are some limitations:
| Cashback Tier | Monthly Cap |
|---|---|
| 1% Tier | £5 |
| 2% Tier | £5 |
| 3% Tier | £5 |
| Total Maximum Cashback | £15 |
The total monthly cashback is capped at £15. This means customers can save up to £180 a year on their household bills. This feature makes the Santander 123 Current Account a great choice for those wanting to save money and get the most from their banking.
Interest Rates on Account Balances
The Santander 123 Current Account has great interest rates. You can earn 1.75% AER (variable) interest on balances up to £20,000. This rate is applied daily and paid monthly, making it a good choice for those who want to grow their money.
For those with bigger balances, this interest rate can be a big plus. It can help cover the monthly account fee and give a steady return on your money. Here’s how much you could earn:
| Balance | Annual Interest Earned |
|---|---|
| £5,000 | £87.50 |
| £10,000 | £175.00 |
| £20,000 | £350.00 |
While these rates are good, it’s smart to compare them with other high-interest accounts. Some might offer better rates or extra benefits that fit your financial goals.
Remember, interest rates can change. It’s important to keep up with any updates to get the best deal. Checking your account balances and interest regularly can help you make smart money choices.
Santander 123 Current Account Reviews: Cashback and Interest Rates
The Santander 123 Current Account has mixed reviews. People like its cashback and interest features. Yet, experiences vary, showing the account’s rewards appeal to some.
Customer Experiences and Feedback
Feedback on the account is varied. Out of 1,227 reviews, 55% gave it 5 stars, and 27% gave 4 stars. Users like the cashback on bills and interest on balances. They also find online and mobile banking easy.
Pros and Cons Analysis
The account’s good points include:
- Up to 3% cashback on selected household bills
- 1.75% AER interest on balances up to £20,000
- Low minimum pay-in requirement
- Excellent branch and phone customer service
However, there are downsides:
- £4 monthly account fee
- Cashback caps of £5 per tier, £15 total monthly
- Some customers feel there are better banking options
Comparison with Previous Versions
The current Santander 123 account keeps similar features but with new rates. Here’s a comparison:
| Feature | Current Version | Previous Version |
|---|---|---|
| Monthly Fee | £4 | £5 |
| Interest Rate | 1.75% AER (up to £20,000) | 1.50% AER (up to £20,000) |
| Max Cashback | £15 per month | £15 per month |
| Cashback on Energy Bills | 4% for first 2 months, then 2% | 2% |
Reviews show the account’s worth depends on spending and bills. For those who use it well, it can earn £317 in the first year after fees.
Alternatives to Santander 123 Current Account
Looking for bank account alternatives? Let’s explore some competitor accounts. We’ll compare their features to help you find the best fit for your financial needs.
Santander Edge and Edge Up Accounts
Santander has two alternatives to its 123 Current Account. The Edge account gives 1% cashback on bills and debit card spending for £3 a month. The Edge Up account offers more cashback and 3.50% interest on balances up to £25,000 for £5 a month.
Competitor Bank Offerings
Several banks offer attractive alternatives:
- Nationwide FlexDirect: 5% interest on balances up to £1,500 for the first year
- Kroo Current Account: 4.10% interest on balances up to £85,000
- Starling Bank: 3.25% interest on balances up to £5,000
- Chase Bank: 1% cashback on spending for 12 months, capped at £15 monthly
Account Comparison
When comparing accounts, look at interest rates, cashback offers, and fees. Some standout features include:
| Bank | Key Feature | Interest Rate |
|---|---|---|
| Nationwide | Highest interest for small balances | 5.00% (up to £1,500) |
| Kroo | High interest on large balances | 4.10% (up to £85,000) |
| Santander Edge Up | Cashback + interest combo | 3.50% (up to £25,000) |
| Chase | Cashback on spending | 1% cashback |
Remember to evaluate your spending habits and savings goals when choosing between these account alternatives. Each offers unique benefits that might align better with your financial situation than the Santander 123 Current Account.
Maximizing Benefits of Santander 123 Current Account
To get the most out of your Santander 123 Current Account, focus on maximizing cashback and optimizing your financial strategy. The account offers excellent opportunities for savvy customers to boost their savings through smart money management.
First, ensure you meet the £500 monthly deposit requirement. Set up at least two active Direct Debits to qualify for account benefits. Use your account for all eligible household bills to maximize cashback earnings across different tiers.
Maintain a balance close to £20,000 to optimize interest earnings. Regularly review your spending patterns and bill payments to align with the cashback tiers. This approach helps in financial optimization and ensures you’re extracting maximum value from your account.
| Account Feature | Optimization Strategy |
|---|---|
| Cashback | Pay all eligible bills through the account |
| Interest | Keep balance near £20,000 |
| Direct Debits | Set up at least two active ones |
| Monthly Deposit | Ensure £500 minimum |
Consider combining your Santander 123 Current Account with Santander Retailer Offers for additional cashback opportunities. This strategy can significantly enhance your overall financial benefits and contribute to effective money management.
Conclusion
The Santander 123 Current Account is a great choice for those who want to save money. It offers cashback rewards and interest rates that can help with your finances. You can earn up to 3% cashback on bills and 3% interest on your balance.
Before choosing this account, think about the £4 monthly fee. Compare it to what you might earn. For example, the Santander Edge current account offers up to £240 yearly cashback for £3 a month. The Edge Saver has a 7% interest rate on balances up to £4,000, beating many others.
Consider your spending and account balance when deciding. If you pay a lot of bills through your account, the 123 Current Account might be perfect. But, other accounts like the Santander Edge or competitors might be better for you. Always check your account usage and compare with other options to make smart financial choices.
Source Links
- Santander launches new Edge Up account to replace 123 account
- Smart Money People
- Santander Edge vs Edge Up vs 123 review: cashback current accounts compared – Be Clever With Your Cash
- Santander launches new current account offering up to £30 cashback per month
- Santander Edge review: Earn 6% interest and 1% cashback – Be Clever With Your Cash
- Santander Edge review – How does it compare? – Money To The Masses
- Santander Edge Up review – is it the best for current account interest? – Money To The Masses
- Smart Money People
- Santander to slash interest and cashback as 123 account takes big hit
- Santander 1|2|3 Current Account Review
- Santander 123 Current Account Reviews
- 123 current account key facts document BANK0543OCT22H
- Our best current accounts UK – Times Money Mentor
- Best Current Accounts 2024 – Be Clever With Your Cash
- This is Money’s pick of the five best current accounts
- Santander Ultimate Cash Back Credit Card | Santander Bank
- Best high-interest bank accounts 2024 – Which?
- Santander 123 Account: A Comprehensive Guide
- Santander Edge Saver review: earn 6% interest – Be Clever With Your Cash
- Should You Keep Your Santander 123 Lite Account? – Pounds and Sense
