- From 12 April 2021, Santander will reduce the interest rate on its 1I2I3, Select and Private Current Accounts to 0.3%1 per annum on balances up to £20,000
- It will also lower the fee on its 1|2|3 Current Account from £5 to £4 a month
- Cashback on household bills is unchanged, and Santander remains the only bank to offer customers both in-credit interest and cashback on bills
- There is no change to the 1|2|3 Lite Current Account, which continues to offer customers cashback on household bills for a fee of £2 per month
From 12 April 2021, Santander will be reducing the in-credit interest rate for its 1I2I3, Select and Private Current Accounts, from 0.6% to 0.3% on balances up to £20,000, giving customers up to £602 in interest per year on their in-credit balance.
Santander will also be lowering the fee on its 1I2I3, Select and Private Current Accounts from £5 to £4 per month. This will mean customers pay £48 per annum, a saving of £12.
With no change to the cashback benefits provided on the 1I2I3, Select and Private Current Accounts, Santander remains the only provider to offer a current account that pays both cashback on household bills3 and interest on credit balances to its customers. The changes mean customers can earn a maximum of £240 per year in interest and cashback for a £4 monthly fee, equivalent to £48 per annum.
On top of this, customers can earn up to 15% cashback on their credit and debit card spending through Santander’s Retailer Offers service.4 The service gives customers the ability to select offers from a wide range of retailers and earn cashback automatically when they make their purchase with their Santander debit or credit card.
Susan Allen, CEO, Retail and Business Banking at Santander, said: “With the Bank of England base rate remaining at its lowest level on record, and significant recent reductions in interest rates on current and savings accounts across the industry, we have taken the difficult decision to reduce the interest rate on our 1I2I3, Select and Private Current Accounts. However, by lowering the monthly fee, we’ve ensured the accounts continue to provide customers with long term, everyday value, and Santander remains the only bank to offer both in-credit interest and cashback on household bills.”
Santander will be contacting all customers over the next month to explain the changes. Details are available 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 to 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. They will be provided with alternative current account options. These could include 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 £2 per month, or the Everyday Current Account, which has no fee but doesn’t offer interest or cashback on household bills.
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 Offers(5) and additional cashback of up to 15% through Retailer Offers.
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Notes to Editors
1) 0.30% AER/0.30% Gross (variable)
2) For a customer that has a balance of £20,000 for a full year, interest earned will be £59.92.
3)
Cashback amount | Household bill |
1% (capped at £5) | Council tax bills Mobile and home phone bills, broadband and paid-for TV packages Santander monthly mortgage payments |
2% (capped at £5) | Gas and electricity bills Santander Home Insurance premiums (policies administered and underwritten by Aviva Insurance Limited) Santander Life Insurance premiums (policies administered and underwritten by Aviva Life & Pensions UK Limited) |
3% (capped at £5) | Water bills |
4) More information on Retailer Offers can be found here.
5) More information on 1|2|3 World Offers can be found here.
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 June 2020, the bank had around 23,000 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 the first half of 2020, Banco Santander had more than a trillion euros in total funds, 146 million customers, of which 21.5 million are loyal and 40 million are digital, 11,800 branches and 194,000 employees.