Home Business Santander will raise fees on 123 current account to £60 pa

Santander will raise fees on 123 current account to £60 pa

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Banks will compete to lure customers to switch current account

 

More than three million Santander customers will be charged £60 a year for everyday banking services from January, up from £24 …reports Asian Lite news

Banks will compete to lure customers to switch current account
Banks will compete to lure customers to switch current account

One of Britain’s biggest banks – Santander is more than doubling the charges on its main current account, severely reducing the value of the perks offered on the account.

The sharp increase can be disclosed by The Telegraph as the regulator prepares to intervene on current account rip-offs.

More than three million Santander customers will be charged £60 a year for everyday banking services from January, up from £24 today, reports The Telegraph.

Santander is also increasing the fees on its main credit card after EU laws reduced the profits banks could make from each transaction.

The price rises are a blow to vast numbers of customers lured to Santander from its “big four” rivals – Lloyds, Barclays, HSBC and RBS.

Many were taken in by the attractive perks on its “123” current account and credit card, and endorsements from experts such as television money guru Martin Lewis, Telegraph adds.

Santander staff will be told early this week that the monthly fee on the current account will rise from £2 a month to £5 next year. Customers will receive the news later this week, it is understood.

For many, the higher charge will negate the current account’s benefits, which include 3 per cent interest and cashback on bills. It may remain attractive only to those with large savings pots.

Fees for the credit card, which offers up to 3 per cent cashback on spending, will rise from £24 to £36 a year.

The changes may prompt rival firms to act and come just weeks ahead of proposals to stop banks exploiting customers.

Critics said the moves “made a mockery” of the Santander’s advertising strapline: “simple, personal, fair”.

Many of those who are switching are choosing the Santander 123 account because it offers up to 3 per cent interest on balances between £3,000 and £20,000 and between 1 per cent and 3 per cent on household bills.

The Santander 123 credit card pays between 1 per cent and 3 per cent cashback on spending in supermarkets, department stores and on travel.

The bank makes money from customer fees and by charging retailers for each transaction. But from October, the maximum “interchange” rate charged to shops will be 0.3pc of the purchase price, down from 0.7pc on average today.

 

 

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