Finding the best current account

IN 2012 Santander launched its 123 Account to great fanfare. Throwing down the gauntlet to the traditional Big Four high street banks, the 123 Account offered interest of up to three per cent on balances up to £20,000, plus cashback of up to three per cent on bills paid by direct debit, and all for a monthly fee of just £2.

The account was a roaring success, attracting 250,000 new customers in its first year, and by January 2016 – when Santander raised the monthly fee to £5 – there were 3.6 million 123 account holders.

In November 2016 the bank halved the interest rate to 1.5 per cent, still reasonably competitive but, come May 2020, it began a series of cuts. First, interest was cut to one per cent with a £15 a month ‘cap’ on cashback, then in August 2020 interest was reduced to 0.6 per cent, and finally in April 2021 to just 0.3 per cent, while the monthly account fee was cut by a measly £1 to £4.

So, at its launch, the 123 Account paid interest of £600