Santander UK have issued an important message to anyone on their 123 Current Account.
The bank has announced that is has increased the rate on its flagship accounts, as competition between providers ramps up. For those with balances up to £20,000, the annual in-credit interest rate has been increased to 1.75 per cent from 1.5 per cent.
As Liverpool Echo reports, new rate of interest should have been automatically applied on Tuesday, meaning customers can now earn up to £347.22 in interest per year, in addition to any cashback they earn on selected household bills paid by direct debit.
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In each of its three different cashback tiers, cashback is capped at £5 on household bills through the 123 accounts. Customers can earn 1 per cent cashback on council tax bills, mobile and home phone bills, broadband and paid-for TV packages, and Santander monthly mortgage payments.
For gas and electricity bills, Santander home insurance premiums and Santander life insurance premiums, customers can receive 2 per cent cashback, as well as 3 per cent cash back on water bills.
However, for all of this, there is a monthly fee of £4 for the accounts and Santander said this will remain unchanged. Santander said the interest rate on its 123, Select, and Private current accounts is variable and does not track the Bank of England base rate.
This comes after The Bank of England hiked the base rate to 3 per cent last week, marking the latest in a string of increases. Many savings providers have been improving their rates in recent months and some current account providers have also been upping their offers of cash to switch.
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