Following a recent review of our current account products, Santander is today announcing some changes to the 1|2|3 Current Account interest rate and the arranged overdraft structure. The changes are being made due to the market expectation of interest rates staying lower for longer, compounded by increased costs brought about by changes in the banking industry.

We will be writing to all customers individually, in advance of the changes taking effect, so they have plenty of time to understand the details.

Market interest rates have fallen considerably since the 1|2|3 Current Account was launched. Top paying Instant access rates in the market were around 3%, whereas now they are around 1%1. This is further compounded by the current market expectation that interest rates will stay lower for longer. Given these market conditions, we are having to make changes to the 1|2|3 Current Account to balance the economics of the product with the value offered to customers.

From 1 November 2016, the 1|2|3 Current Account will pay a single interest rate of 1.50% AER / 1.49% gross monthly (variable) on balances up to £20,000. This means customers will now earn interest on balances below £1,000, which was previously not the case. There is no change to the cashback benefit, which will continue to offer the 1%, 2% and 3% cashback on various household bills paid by Direct Debit.

Additionally, from 9 January 2017, the Arranged Overdraft Usage Fee structure will be tiered to reflect the amount of arranged overdraft used, affecting customers using an arranged overdraft of £2,000 or more. This change will also apply to the Everyday Current Account.

Arranged Overdraft Limit used Current fee New fee from 9 Jan 17
Below £2,000 £1 a day £1 a day
£2,000 to £2,999.99 £1 a day £2 a day
£3,000 and above £1 a day £3 a day
Monthly Overdraft Fee Cap £95 £95


The £12 overdraft buffer, where no overdraft fees apply, will remain in place and all overdraft fees will continue to be capped at £95 per month.

Reza Attar-Zadeh, Head of Retail Products, Santander, said: “Although we are making changes, the new interest rate of 1.50% on the Santander 1|2|3 Current Account is a very competitive instant access rate on balances up to £20,000, which means customers can earn up to £298 per year in interest, plus cashback, for an account fee of £5 per month. Customers will continue to have access to preferential 1|2|3 World offers and, on top of this, they can earn more cashback using our Retailer Offers.”

Helping customers
Santander recognises that these changes may mean some customers will need to consider whether their account is still right for them.

Santander will be writing directly to customers telling them about the changes and providing a minimum of 60 days advance notice. Details will also be included in monthly statements and on Santander’s website, with a full breakdown of the changes.

Customers can see how much cashback and interest they currently earn on their 1|2|3 Current Account by looking at their monthly account statement or by logging in to online / mobile banking. The updated 1|2|3 calculator will help customers to understand how much they could earn in future, so they can decide if the account is still right for them.

For customers with lower balances, who wish to continue benefiting from cashback and are happy to use online/mobile banking, Santander now offers the 1|2|3 Lite Current Account with cashback on selected household bills paid by direct debit and no in-credit interest, for just £1 per month.

Customers can find more details of the changes at www.santander.co.uk/uk/account-changes and the updated cashback calculator will also be available at www.santander.co.uk/info/123-calculator.

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The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.

Notes to Editors
1) Data provided by Moneyfacts.

Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its innovative products for retail customers and relationship banking model for UK SMEs. As at 30 June 2016, the bank serves around 14 million active customers with c. 20,000 employees and operates through 847 branches (which includes 58 university branches) and 69 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.


About Us
Banco Santander (SAN SM, STD US, BNC LN)
is a leading retail and commercial bank, based in Spain, with a meaningful market share in 10 core countries in Europe and the Americas. Santander is the largest bank in the euro zone by market capitalization and among the top banks on a global basis. Founded in 1857, Santander had EUR 1.52 trillion in managed funds, 12,500 branches and 190,000 employees at the close of June 2016. In the first half of 2016, Santander made underlying profit of EUR 3,280 million.

Media Enquiries
Lara Lipsey lara.lipsey@santander.co.uk          Tel: 020 7756 4518       Mobile: 07713 560 209
Andy Smith andy.g.smith@santander.co.uk      Tel: 020 7756 4212       Mobile: 07824 473 338

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