Santander announces change to in-credit interest rate on 1|2|3, Select and Private Current Accounts

• From 3 August 2020 Santander will reduce the interest rate on its 1I2I3, Select and Private Current Accounts to 0.6%¹ per annum on balances up to £20,000
• Cashback on household bills will remain unchanged with customers able to earn up to £15 per month or £180 per annum²
• Customers can earn up to £299.60 per year in interest and cashback for a £5 monthly fee (equivalent to £60 per annum)
• The change is being made in light of the recent reductions in The Bank of England Base Rate to 0.10% and the challenging economic environment

From 3 August 2020, Santander will be reducing the in-credit interest rate for its 1I2I3, Select and Private Current Accounts, from 1.00% to 0.6% on balances up to £20,000.  This will mean customers can earn up to £119.60³ in interest per year on their in-credit balance. 

There will be no changes to the cashback benefits provided on Santander’s 1I2I3, Select and Private Current Accounts, with customers able to earn a total of £180 per annum in cashback on their household bills paid through these accounts. Santander is currently the only provider to offer a current account that pays both cashback on household bills and interest on credit balances to its customers.

There will also be no change to the monthly account fee, which will remain at £5 per month. This means that in total, customers could receive up to £299.60 per year in interest and cashback for a £5 monthly fee, equivalent to £60 per annum.

The change is being made as a result of the recent reduction in the Bank of England Base Rate to an all time low of 0.10%. It also takes account of the ongoing financial impact of regulatory changes in the banking industry.

Susan Allen, Head of Retail Banking at Santander, said: “While we have had to make a difficult decision in light of the current interest rate environment, our 1|2|3 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. Customers are also able to continue to make use of the exclusive benefits offered by being part of our 1|2|3 World.”

Santander will be contacting all customers in May 2020 to explain the change. Details of the change can also be found on Santander’s website, along with the 1I2I3 calculator which has been updated so customers can see what they will earn under the new pricing. Customers can also check how much cashback and interest they’ve earned to date from their current account by logging in to online or mobile banking.

To further support customers manage their finances, Santander will also be contacting the small number of those for whom the change to the interest rate may mean their earnings on the account no longer meet the monthly fee.  These customers will be provided with alternative current account options, for instance the 1|2|3 Lite Current Account which offers the same cashback on household bills as the 1|2|3 Current Account, for a lower fee of £1 per month.

All 1|2|3 Current Account customers will continue to have access to the benefits and features associated with their account, including preferential 1|2|3 World Offers⁴ and additional cashback of up to 15% through Retailer Offers⁵.

- Ends -
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.

Notes to Editors
1) 0.6% AER/0.598% Gross (variable)
2)

3) Total annual interest on £20,000 is £119.60
4) More information on 1|2|3 World Offers can be found here: https://www.santander.co.uk/personal/123-world
5) More information on retailer offers can be found here:
https://www.santander.co.uk/personal/support/understanding-our-services/retailer-offers

Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 30 December 2019, the bank had around 23,500 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.

Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in Europe and the Americas, and is one of the largest banks in the world by market capitalization. Its purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising over €120 billion in green financing between 2019 and 2025, as well as financially empowering more than 10 million people over the same period. At the end of 2019, Banco Santander had EUR 1.05 trillion in total funds, 145 million customers, of which 21.6 million are loyal and 37 million are digital (52% of active customers), 12,000 branches and 200,000 employees. Banco Santander made underlying profit of EUR 8,252 million in 2019, an increase of 2% compared to the previous year.