Santander’s new 123 current account helps you pay your monthly bills as well as offering enticing interest rates but its own monthly charge means it’s most suitable for those with high income and expenses.
The 123 current account pays cashback on your monthly household bills of 1% for council tax and water, 2% for energy and 3% for phone, mobile, broadband and TV.
Santander offers high interest rates
If, for example, you paid £100 for council tax, £30 for water, £100 for gas and electricity and £40 for phones and home entertainment each month, you would earn £67 cashback over a year.
You do pay a £2 monthly account fee, which would reduce those gains to £43 but the higher the bills you pay, the more cashback you receive.
Santander is offering attractive interest rates, particularly if your balance is above £3,000. The account pays 1% (AER variable) on balances over £1,000, 2% on balances over £2,000 and 3% on balances between £3,000 and £20,000.
Cashback replaces Santander’s £100 offer
The 123 account replaces Santander’s Preferred account, which is now closed to new customers. It used to offer a £100 cash incentive to open an account, as well as an interest free overdraft for the first year.
You must pay a minimum of £500 a month into the 123 account with no interest paid on balances under £1000.
Santander, which recently announced increased overdraft fees across its current account range, will charge no daily fee on arranged overdrafts for the first four months with a 123 account and then £1 a day, capped at £20 per month.
Large bill payers to benefit
As illustrated by the Which? best bank account tables, the Santander 123 current account pays some of the best interest rates available on the market at the moment.
However, it is those with large monthly bills to pay, coupled with a regular balance over £3,000 that would benefit the most and it is also worth remembering that Santander is at the bottom of our customer satisfaction ratings, scoring a lowly 42%.
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