Santander UK customers face price hikes on three accounts within a few days. Select, Private and 1|2|3 account holders will pay an extra £1 per month to keep them open.
The rise from £4 to £5 beginning on May 11 means it will cost £60 per year to hold one of those Santander accounts. Select and Private customers will also see the APR on overdrafts over £500 change from 27.06% to 28.33% (variable).
Santander’s 1|2|3 account is no longer available to anyone joining the bank, but some existing customers still have it.
The bank pays cashback on household expenses such as water, mortgage payments and council tax to eligible customers. On balances up to £20,000, the account also pay 2% AER.
One percent cashback is typically paid for mortgage, water and council tax payments from the account, while 2% is paid on gas and electricity.
Mobile phone, landline, broadband and paid for TV packages can get 3% cashback.
To qualify for cashback and interest on the 1|2|3 account, holders have to pay in at least £500 per month and have at least two active Direct Debits.
New joiners can still open Select and Private accounts, but they have to meet certain higher earner requirements.
Andrew Hagger from MoneyComms told The Sun: “Even though the fee is increasing by £1 per month, this should still be covered by the cashback on bills for most people.”
Rachel Springall from Moneyfacts told the same publication that loyal customers would feel disappointed at the fee rise.
She said because cashback earnings vary based on household spending, it is vital users keep on top of their outgoings and calculate if the account is still worth having.
Ms Springall added that now may be the perfect time for customers to “switch and ditch”.
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