SANTANDER is axing a popular current account with top rates after more than a decade.
The bank is removing its existing 123, Select, and Private current accounts from sale today.
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In its place, Santander has launched a new current account offering cashback and other perks.
The new Edge Up current account offers 1% cashback – up to £15 a month – on selected monthly bills paid by direct debit, including council tax, water, gas, electricity, phone, mobile, and paid TV subscriptions.
And 1% cashback on essential spending – up to £15 per month – is also being offered on essential debit card spending at supermarkets and on travel.
To receive £30 monthly cashback, customers would need to spend at least £1,500 a month on eligible essential debit card spending and at least £1,500 a month on eligible monthly bills paid by direct debit.
Santander said existing current account customers have a choice over whether they would like to keep their existing account or transfer to an Edge Up account.
Those choosing to transfer can keep all their existing details, including their account number and sort code, Santander said.
Santander’s 123 account launched in the UK back in 2012 and it was praised for the innovative way in which it offered customers both cashback on household bills and interest on in-credit balances.
However, the perks on the account became less generous in the era of ultra-low interest rates.
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Santander has recently increased its in-credit interest rate, as rates have risen once more.
The 123 Student and 123 Mini accounts will remain on sale.
Andrea Melville, director for personal current accounts and savings, Santander UK, said: “We know many people are experiencing financial pressures at the moment with the increased cost of the weekly food shop, high energy costs, and other bills going up.
“Our new Edge Up Current Account is all about making it easier for our customers to make the most of their everyday spending and help them make their finances stretch a little bit further.”
How do the accounts compare?
Santander’s 123 account pays up to 3% on selected household bills, capped at a maximum of £15 per month, as well as offering 2% interest on balances up to £20,000.
The bank said its new Edge Up account will offer customers 3.5% interest on balances up to £25,000.
Customers can benefit from fee-free debit card purchases and cash withdrawals abroad and fee-free international bank transfers, Santander said.
The new Edge Up account carries a £5 monthly fee, while the 123 account has a £4 monthly fee.
Edge Up customers will also have access to Santander Boosts, which offers customers cashback, vouchers, discounts, prize draws, and giveaways tailored to their individual interests.
People can sign up for the account online, over phone, or in branch.
To benefit from the cashback and interest features on the Edge Up account, people must pay in a minimum of £1,500 a month and set up two direct debits from the account.
With the 123 account, people must pay in at least £500 a month and have two direct debits.
Santander said an online calculator is being made available, to help customers decide which of its current accounts is best for them.
Rachel Springall from Moneyfactscompare.co.uk, said: “Overall, it’s a package that may suit customers who use their primary account for both their regular bills and daily spending, but it’s important they ensure they are earning enough off the account so they can cover the monthly account fee.
“As with any deal, benefits are great to have included so long as they are used, and customers must pay in a minimum of £1,500 a month and set up two direct debits to benefit from the cashback and credit interest offer.
“As with any deal, its vital bank customers compare this package to the wider market to ensure it meets their individual needs.”
How do I switch bank account?
It’s easy to switch your bank account using the Current Account Switch Service (CASS).
You don’t have to remember to move direct debits over when moving as it does this everything for you.
All you have to do is apply for the new account you want and the new bank will let your existing provider know you’re moving.
There are some steps you can take before switching though, such as choosing your switch date, or organising transferring your old bank statements to your new account.
How to find the best bank accounts
With your current rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research websites like MoneyFacts.co.uk and price comparison websites such as Compare the Market, Go Compare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
