Santander hikes fees on 123 Current Account
Written on 12 January 2016
Santander has increased the monthly fee on its popular 123 Current Account from £2 a month to £5. This takes the annual cost of the account from just £24 to £60 and affects over 3 million customers.
“This is a substantial increase and as such customers who haven’t already should be seriously considering whether they’re getting enough back from the 123 current account to justify what they’re paying,” says Matt Saunders, current account spokesperson at Gocompare.com.
The good news is that Santander hasn’t cut the amount of cashback and interest the account pays. So you can still earn up to 3% cashback on household bills and up to 3% interest on credit balances over £1,000. If you’re considering the account or deciding whether to switch away, it’s worth using Santander’s cashback and interest calculator which shows you how much you can expect to earn over the course of the year, taking the £60 fee into account.
Current account offers
The move by Santander comes at the same time as other banks have been improving their current account offers as they battle to win customers.
M&S Bank increased the amount it’ll pay switchers from £100 to £220 last week. It now offers a £100 gift card when you switch and then pays £10 a month onto the gift card for 12 months, providing you pay in a minimum of £1,000 a month and have two direct debits on your account. Meanwhile First Direct is offering £150 to anyone switching to it via MoneySupermarket (£125 if you go direct). And today Clydesdale and Yorkshire Bank have announced they are bringing back their £150 switching deal until 31 March.
The Co-operative Bank launched its Everyday Rewards scheme yesterday which lets you earn up to £5.50 a month if you meet certain conditions such as paying in a minimum of £800 a month, staying in credit and opting for paperless statements. And Barclays has announced it is doubling its monthly rewards in January for those that sign up to the rewards scheme before the end of the month (worth up to £32).
Choosing the right bank account for you
Comparing bank accounts has never been easy but has got harder as banks try to dazzle you with reward schemes, cashback for switching or high interest rates on some of your balance.
If you’re looking for a new bank account, try not to get side-tracked by short-term special offers and think about how you will use the account - for example, are you likely to stay in credit, use an overdraft or treat your account more like as savings account?
Our guide on Choosing a bank account has more information to help you decide. And our guide on Switching a bank account explains how the seven day bank account switching service works. Which? also produces useful best buy tables showing the best bank accounts if you always stay in credit or use an authorised overdraft.