Santander to cut rate on popular 123 current account again

Santander to cut rate on popular 123 current account again

High street bank slashes current account rates

Brean Horne
Tue, 05/05/2020 – 15:51

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Santander will cut the interest rate on its popular 123 account from 1% to 0.6% in a blow to savers who once earned 3% from the deal.

The change will take place from 3 August 2020 on balances of up to £20,000 and means customers will only be able to earn a maximum of £119.60 rather than £200 currently.

The bank cut its 123 savings rate from 3% to 1.5% in 2016, then lowered it to 1% In January before announcing a further cut today.

Santander says it is passing on the cuts to Bank of England base rate, which is factored into the interest many savings deal pay.

Base rate was 0.75% in January and was cut to a record low of 0.1% in March.

The 123 account has a £5 monthly flat fee, which would cost users £60 a year, or half of any interest they could earn if they had the £20,000 maximum in the account.

But the deal does also offer cashback on household bills of up to £180, provided they are paid through the account.

Susan Allen, head of retail banking at Santander, says: “While we have had to make a difficult decision in light of the current interest rate environment, our 123 current account continues to provide good ongoing value to customers.

It remains the only account that offers the ability to receive both interest on balances and cashback on household bills, meaning customers can earn almost £300 per year, for an account fee equivalent to £60 per year.”

Some money commentators say the change will be enough for savers to think about leaving the bank.

John Crossley, head of money at comparethemarket.com, says: “This decision will likely be a blow to Santander customers.

Launched in 2012, millions switched to the bank’s 123 account to take advantage of market-leading interest rates and cash back deals.

While some benefits remain, the latest cuts may prompt some Santander customers to consider switching to a different provider.”

However, savers who want an interest-paying current account have few other options.

The same interest rate cut will also apply to Santander’s Select and Private current accounts.

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Top savings accounts disappear – where can you find the best rates?

Top savings accounts disappear – where can you find the best rates?

Customers should catch top savings rates before they go

Brean Horne
Tue, 05/05/2020 – 11:28

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The coronavirus lockdown means many households are spending less, but experts say those wanting to save this extra cash should act quickly before top deals vanish.

Household spending has fallen £795 on average since the lockdown began, according to research by the Centre for Economics and Business Research (Cebr).

Consumers hoping to save this cash are being advised to take advantage of the best savings deals quickly, because banks tend to cut their best rates in response to a sudden influx of money.

The average rate of the top ten easy access accounts has already fallen from 1.23% to 1.15% over the last month alone, analysis from Moneyfacts shows.

Providers may also withdraw products from the savings market if too many customers open an account and they are unable to meet the demand.

Rachel Springall, finance expert at Moneyfacts.co.uk says: “Savings providers may start to see more money coming their way due to the rise in household savings, so the top deals could be tweaked in response.

“Whatever savers decide to do with their extra cash it’s important that they don’t wait around for too long to take advantage of the top rates on easy access accounts.”

Top easy access saving accounts

RCI Bank offers the best easy access rate on the market at 1.2%.

This is followed closely by Marcus, Saga and Investec Bank, who all pay 1.19% AER.

Today AER
RCI Bank UK – Freedom Savings Account 1.2%
Marcus by Goldman Sachs® – Online Savings Account 1.19%
Saga – Easy Access Savings Account 1.19%
Investec Bank plc – Easy Access Account 1.19%
National Savings and Investments – Income Bonds 1.15%
Buckinghamshire Building Society – Single Access Saver (Issue 2) 1.15%
Shawbrook Bank – Easy Access (Issue 20) 1.15%
Family Building Society – Market Tracker Saver (1) 1.13%
Ford Money – Flexible Saver 1.07%
Family Building Society – Online Saver (2 1.06%
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Santander private bank customers report being locked out of accounts for two weeks

Santander private bank customers report being locked out of accounts for two weeks

Cater Allen users run into trouble following bank IT upgrade

Stephen Little
Tue, 05/05/2020 – 09:38

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Users of Santander’s private banking arm Cater Allen have reported being locked out of their accounts or struggling to make payments following an IT upgrade.

One user says he was unable to get into his account for more than two weeks and could not get through to the customer services department.

Ian Jones from, 62, from Hove in East Sussex, says that following a Cater Allen IT upgrade in February he had problems entering his password and was booted out of the system.

“Whilst I was away on holiday with my wife the bank changed its password system. I forgot about this when I came back and was locked out after I entered the wrong one.

“I tried phoning and sending an email but after two weeks Cater Allen had not responded. I then sent another email and the following day I got a phone call from a woman who was very helpful and managed to sort it out very quickly.

“But for two weeks there was no acknowledgement of my email and during that time we were not able to access our money.”

Last year Cater Allen started upgrading its IT infrastructure and is moving its customers onto a new system in batches.

However, the ongoing migration has been beset by problems, with some users reporting that they have had difficulty using the new website.

Another user says that following the IT upgrade there had been problems in processing payments due to the new portal.

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Last year, Cater Allen customers complained on social media they were unable to see their accounts on their mobile phones and could only access their cash through their desktop computers.

Some customers also reported not being able to see their bank balances and transactions, while others had problems using the new menu system.

Cater Allen says it wrote to customers before moving them to the new platform to help them use the new system.

A Cater Allen spokesperson says: “Over the past year, we have been gradually moving Cater Allen customers to a new online banking platform which offers improved functionality and enhanced security features to a wider group of customers compared to our previous platform.

“Thousands of customers are successfully logging onto the new platform every day, with very few reporting problems, although we continue to gather and act upon feedback from customers to further refine and improve their online banking experience.

“A small number of customers have been locked out of their accounts for security reasons when they have incorrectly entered their security credentials too many times. They can quickly get back online by calling our contact centre.”

Following customer feedback Cater Allen has introduced additional on-screen guidance for users who may have forgotten passwords.

Cater Allen was an independent bank until it was acquired by Abbey National in 1997. Abbey National then sold it to Santander in 2004.

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