In a move that will disappoint thousands of savers, high street banking giant Santander has confirmed it is pulling the plug on its once-popular 123 Current Account.
The account, long favoured for its monthly cashback offers and interest on balances, will officially close on a set date later this year. This decision marks the end of an era for a product that was a major player in the competitive UK current account market.
Why is Santander Closing the Account?
The bank cites a combination of soaring operational costs and a significant shift in the wider economic landscape, particularly the enduring era of low interest rates. These factors have made the account's business model increasingly unsustainable.
A Santander spokesperson stated: "We continually review our products to ensure we are offering customers the best possible value. Following this review, we have taken the difficult decision to close the 123 Current Account."
What Does This Mean For Current Customers?
Account holders need not panic immediately. The bank will commence a phased closure process, directly contacting all affected customers with detailed information and a timeline of next steps.
Crucially, the valuable benefits will remain in place until the official closure date. This means customers can continue to earn:
- Cashback on household bills: Payments for council tax, broadband, and mobile bills.
- Interest on balances: The tiered interest rate on savings held in the account.
Santander has assured customers that their accounts will remain fully functional, including direct debits and standing orders, throughout the transition period to prevent any disruption to finances.
What Are The Alternatives?
Santander is expected to proactively offer existing 123 account customers a switch to one of its other current account products. However, customers are strongly advised to scrutinise the terms of any new offer.
This closure presents an opportunity to shop around. The UK market is filled with alternatives, from switching bonuses to accounts offering competitive savings pots or different cashback structures. It is more important than ever to compare what's available to find the best new home for your money.
The message for Santander's customers is clear: keep an eye on your postbox and inbox for official communication from the bank, and start considering your options to ensure your finances continue to work for you.
