Which account will earn you essentially the most a refund in your payments?
There are many good causes to vary your financial institution, together with money bonuses, excessive curiosity, fee-free journey cash and low-cost overdrafts.
One function that’s additionally out there is getting cashback on the payments you pay. So you might get 1% again in your Council Tax, or 3% water payments. It’s stuff all of us just about pay for.
Since this kind of account was launched I’ve all the time stated it is smart for us to all have considered one of these present accounts – all supplied by Santander.
In case you’re seeking to open a brand new account you’ll be able to select between the 123 and the Edge, whereas a few of you may nonetheless have the 123 Lite.
So which is best? This text will allow you to determine on one of the best paying choice for you.
Santander cashback present accounts in contrast
First a take a look at what these three accounts supply. The main target of this text is on the cashback on payments, however as you’ll see a few of them supply additional methods to earn cash.
Santander Edge
The Edge doesn’t simply supply cashback on payments as you may get a refund on some spending and a good rate of interest.
I wouldn’t trouble with the debit card cashback as you’ll be able to earn the identical fee elsewhere with out the caps and retailer restrictions. The curiosity may very well be price grabbing – so long as you’re protecting the payment along with your cashback. You may learn my full Santander Edge evaluation right here.
| Month-to-month Charge | £3 |
| Curiosity % | 4% (together with 0.5% bonus for 12 months) on balances as much as £4,000 through a separate Edge Saver account |
| Cashback (capped at £10 per tier every month) | 1% on Council Tax, cellphone, cellular, TV and broadband, fuel and electrical energy, and water payments |
| 1% again on spending at supermarkets and on journey (trains, buses & gas) | |
| Necessities | Pay in £500 a month |
| Pay out at the least two Direct Debits |
Santander 123
The 123 pays extra cashback on some payments than the Edge, and you’ll earn cash on Santander mortgages too. Nevertheless, it comes with a better payment and decrease rates of interest. In reality, I wouldn’t use this in any respect for curiosity as the speed might be simply overwhelmed elsewhere.
| Month-to-month Charge | £4 |
| Curiosity % | 2% on balances as much as £20,000 |
| Cashback (capped at £5 per tier every month) | 1% on Council Tax, cellphone, cellular, TV and broadband payments and Santander mortgage repayments |
| 2% on fuel and electrical energy | |
| 3% on water payments | |
| Necessities | Pay in £500 a month |
| Pay out at the least two Direct Debits |
Santander 123 Lite
This account is not out there to new clients, however for those who’ve already bought one it’ll nonetheless earn you a refund in your payments, so you must know what it presents compared to the others.
| Month-to-month Charge | £2 |
| Curiosity % | None |
| Cashback (capped at £5 per tier every month) | 1% on Council Tax, cellphone, cellular, TV and broadband payments and Santander mortgage repayments |
| 2% on fuel and electrical energy | |
| 3% on water payments | |
| Necessities | Pay in £500 a month |
| Pay out at the least two Direct Debits | |
| Check in to your on-line or app banking each three months | |
| Go paperless |
Do you have to get a Santander 123 or Edge account?
Since most of us are going to be paying these payments, it’s nicely price getting considered one of these accounts. However I wouldn’t use it as my foremost account. There are much better choices in the case of the app and banking expertise, plus a number of with extra profitable extras.
Personally I’d set this up as a further account solely to pay the payments. A standing order out of your foremost account can switch over the required money every month, which can cowl these payments.
Most of those payments are set quantities that received’t change with out discover, so it requires little ongoing upkeep. Although clearly you’ll have to ensure you cowl ones that may change every month – for instance an elevated cell phone invoice.
Santander payments cashback: How a lot are you able to make?
The quantity you earn is dependent upon the scale of the payments. In case you’re a excessive invoice payer, you’ll get extra. However for those who’ve been savvy and shopped round to get one of the best deal, you’ll earn much less.
Clearly there’s the prospect to earn extra from the 123 and 123 Lite because of the increased paying charges on fuel, electrical energy and water. Plus when you’ve got a Santander mortgage there’s additional you’ll be able to earn there too.
Nevertheless all three accounts have caps. For the 123 and 123 Lite it’s £5 cap per class, so essentially the most you’ll be able to probably make every month is £15 – although for many properties that’s unlikely. The Edge caps invoice cashback at £10 a month.
To work out how a lot you’ll make personally you’ll have to get your payments and put them into the cashback calculators on the Santander web sites. Don’t neglect to issue within the month-to-month payment, which can present within the calculator.
Santander Edge cashback calculator
You’ll discover this within the “Cashback” part whenever you click on the arrow to broaden. This calculator additionally has the choice to work out how a lot you’d earn from debit card cashback and curiosity on financial savings.
A fast word: For Council Tax the cashback is calculated as for those who pay it over 10 months slightly than 12. Although the previous is the default approach I’ve all the time most well-liked the consistency of each month. In case you pay by 12 months then you definitely’ll have to multiply the quantity you pay by 12, then divide by 10, and put that determine within the calculator. This is applicable to all three accounts.
Santander Edge cashback calculator
Scroll down the 123 account pages and broaden the part known as “Curiosity and Cashback”. The calculator will then seem. Although you’ll be able to enter a steadiness for financial savings I wouldn’t trouble as you’ll be able to simply beat this fee elsewhere.
Santander Edge cashback calculator
Sadly the 123 Lite calculator is not out there so that you’ll want so as to add £2 to the entire proven in the primary 123 calculator to get the actual determine. Ensure you depart the curiosity discipline empty as there’s no curiosity paid on the Lite.
What to be careful for
Although the classes of cashback are fairly broad and canopy a number of payments, not each provider might be included. For instance Giffgaff doesn’t seem within the eligible provider search kind. Do examine how your provider seems in your financial institution assertion. For instance M&S Vitality doesn’t seem on the checklist, however Octopus Vitality, which is the way you’re billed, does.
Additionally, for those who cut up payments with a associate or housemate and also you pay from separate accounts then you definitely received’t get the total good thing about this kind of account. You possibly can open up a joint account for these key payments, although there are dangers you want to concentrate on.
What I’d make in cashback on payments
Which account could be finest for me?
In case you’re an everyday reader you received’t be shocked to know I’ve bought nearly as good a deal as doable on all my payments. I change vitality supplier steadily (nicely, I did when this was doable) and ditched pay TV years in the past. Plus I’ve haggled low costs on broadband and cell phones.
Our water is on a meter and my Council Tax is sort of excessive, however there’s not an enormous quantity we are able to do to cut back these additional.
| Invoice | My month-to-month price | 123 Lite month-to-month cashback | 123 month-to-month cashback | Edge month-to-month cashback |
| Council Tax | £212 | £2.12 | £2.12 | £2.12 |
| Broadband | £28 | £0.28 | £0.28 | £0.28 |
| Cellular Telephones (x2) | £16 | £0.16 | £0.16 | £0.16 |
| Gasoline & Electrical energy | £250 | £5 | £5 | £2.50 |
| Water | £41 | £1.23 | £1.23 | £0.41 |
| Month-to-month payment | -£2 | -£4 | -£3 | |
| MONTHLY TOTAL | £6.79 | £4.79 | £2.47 | |
| ANNUAL TOTAL | £81.48 | £57.48 | £29.64 |
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Santander Edge vs 123 rates of interest
The desk beneath reveals how a lot curiosity you’d earn on £1,000, £4,000, £10,000 and £20,000 when held in both the Santander 123, Santander Edge or the most recent top-paying quick access account (on the time of writing) of three.05%. The 123 Lite doesn’t pay curiosity.
These figures are with out the payment, as I’m assuming that that is lined by the cashback you earn annually. In case you aren’t incomes the cashback I don’t see a lot level in utilizing both the Edge or 123 to your financial savings.
The one exception is when you’ve a joint account which lets you open two Edge Savers, and have at the least £4,500 throughout the 2 accounts. And keep in mind the 4% is just for one yr and it then drops to three.5%.
Anyway, again to the returns:
| Quantity saved | Curiosity earned in Santander 123 | Curiosity earned in Santander Edge Saver (1st yr solely) | Curiosity earned in 3.05% paying account |
| £1,000 | £20 | £40 | £30.50 |
| £4,000 | £80 | £160 | £122 |
| £10,000 | £200 | £160 | £305 |
| £20,000 | £400 | £160 | £610 |
It’s clear the Edge pays essentially the most on as much as £4,000, and for balances above that you just’d need cash in one of the best easy-access account.
Nevertheless, to get an actual sense of revenue, you must get the distinction you’d make within the Edge over another easy-access account, and add it to your anticipated cashback return. Then evaluate it to the cashback you’d get on the 123.
In my instance, £4,000 saved within the Edge would make me £38 greater than saving it elsewhere (within the first yr). Add that to the cashback I’d make and it’s an annual whole of virtually £68.
That’s a tenner greater than the cashback I’d earn in a 123 account with £4,000 saved elsewhere. Clearly the distinction might be much less if I’d have a decrease quantity saved.
And naturally, it’s doable to get greater than 3.05% in discover or restricted entry accounts, whereas Barclays presents 5.12% on as much as £5,000. So all these would cut back the distinction additional.
Abstract: Which is one of the best Santander account for you?
Andy’s Evaluation: Edge, 123 or 123 Lite?
In case you have a 123 Lite then I’d completely maintain it. If not, then my intuition is that the 123 would be the higher account. That’s as a result of regardless of a better month-to-month payment you’ll get extra cashback on vitality payments, which might actually add up whereas payments are so excessive.
Even for those who’re additionally tempted by the Edge for the cashback on the grocery store, I’d take a look at options that can earn you a similar 1% at many extra retailers.
And although the rate of interest on the Edge is difficult to beat, I don’t assume it’s sufficient to compensate for the decrease cashback in your payments.
Santander switching bonus
Santander launched its first correct switching bonus in late 2021. The newest supply, in January 2023 is for £200. This can be a first rate deal and is open to current clients.
The supply can come and go, and it could be overwhelmed by different banks so do examine my final checklist of financial institution switching and reward presents.
