Morning all! As you know, I manage several currencies as part of my net worth, and part of it is in the UK in Pounds Sterling. So this post is in GBP, just put a $ sign in front and you get the idea! This post is not sponsored, just my opinion about my bank.
I have been banking with three banks in the UK. HSBC who is uneventful but has my mortgage at a super low rate, First Direct that is part of HSBC group, has stellar customer service, gives you £100 to join and a free overdraft, but I closed the account since managing three banks was a hassle and Santander (Spanish group, ex Alliance and Leicester) is my main bank at the moment because they launched an awesome credit card called Santander Zero, that does not charge me any fee to withdraw money abroad and pay in foreign currencies. That was the card for my needs, in spite of having no cool rewards like airmiles or hotel nights, what I save in foreign exchange fees every year is more than making up for it.
So I moved my current account to Santander as well, and they offered a free current account with travel insurance that seemed pretty cool. They also had the best instant savings account in the market at 3%. Unfortunately, that deal finished after a year on April 15th. The savvy PF nerd that I am fought the procrastinator deeply rooted inside and when the calendar reminder popped up, I started checking the best instant savings rates on Money Saving Experts. Trying to get the best rate is a bit complicated since I am not in the UK at the moment so could only go for one with Santander or HSBC, who let me apply online for more banking products.
The rates offered for easy access savings were all around 1.8%-2.05%, except Santander, who offered 3% again… but on its Santander 123 premium current account. And cashback on top. The conditions are
£2 monthly fee
Cashback: 1% on your mortgage with Santander (not for me), Council Tax (I get £1.49)
2% on utilities (I get £0.62 for electric, water is included in HOA so won’t count)
3% on broadband and phone (I get £0.53 for my broadband bundle with O2, the best provider around, no I didn’t get paid to say that either, they really rock. Got bought by Sky recently though so I don’t know if that will last.)
The account is already paying me £0.64 to keep business as usual (or $1, can’t wait to update my net worth with that life changing amount haha!).
Savings rate: 1% on balances up to £1,000
2% on balances up to £2,000
3% on balances from £3,000 to £20,000.
At the moment I have just over £7,600 so can expect £19 monthly, which is what I was getting on the old savings account with no minimum balance, unfortunately the initial rate is over and it looks like that is the best thing around. I have to pay a £7,000 0% credit card by early June but plan on getting £3,000 on the account by then to keep the 3% rate.
The best thing about this account is that the interest rate runs daily on your current account balance. So it saves a lot of time not having to transfer from savings to fund current, and you get interest even on that little cushion you always leave on the current account to fund an unexpected bill.
Compared to my super cheap HSBC mortgage, Santander is not competitive but if you already have a mortgage with them, with $1,000 monthly payments you would get an extra $10 cashback.
The only perk I lost is the travel insurance, fingers crossed I don’t lose my luggage on my way to France (update: I traveled with a carry-on!), but the insurance was only for European travel anyway, which I have done none of since October 2012. It was great to have it while we were biking around Europe last summer, but now it is not a big loss.
While I was shopping for current accounts, I saw a few premium ones from other banks that offered airport lounge access and that seemed like a neat perk too, although I only plan on flying twice a year at most now, so wouldn’t make up the £20 or so monthly fee. Back in the UK when I was flying to mainland Europe 4 times a month I wish I had opted for one of those, forgetting my fear of flying in their open bars.
Do you bank premium or for free? What do you get for the price?
this post was featured on Freedom 35