You may have seen advertised both the standard Santander 123 cashback account and the 123 Lite. Sometimes it can be challenging to comprehend which one offers the better deal. This is because both provide amazing benefits, but which one is considered more beneficial than one another?
“Our 1I2I3 accounts provide a range of benefits that we know our customer’s value and our goal is to ensure these accounts remain sustainable for the future.”
Susan Allen, Head of Retail Banking at Santander
In this article, we will break each of the accounts down and so you can understand which one is suitable for you.
123 Current Account fees, cashback, interest, and requirements compared
Making sure you get the most out of your money the way you want to is crucial. When comparing different bank accounts, it can sometimes be hard to find the best deal. With so many accounts being advertised to you each day, it’s understandable.
We recognise that monthly fees, cashback, interest rates on the 123 account, and the official requirements are the essential bits of information. To save yourself the worry of comparing them yourself, see the below table.
| Santander 123 | Santander 123 Lite | |
| Monthly Fee | £4 | £2 |
| Cashback on bills (£5 cap per tier for each month) | 1% – Council tax, phone and broadband bills, Santander mortgage payments 2% – Gas and electricity bills, Santander Home insurance, Santander life insurance 3% – Water bills | 1% – Council tax, phone and broadband bills, Santander mortgage payments 2% – Gas and electricity bills, Santander Home insurance, Santander life insurance 3% – Water bills |
| Retail cashback offers | Up to 15% at selected retailers | Up to 15% at selected retailers |
| Interests | 0.3% on balances up to £20,000 | None |
| Requirements | 1. Pay a minimum of £500 into your account each month. 2. Must have two active debit cards. 3. You need to be over 18 and live in the UK. | 1. Pay a minimum of £500 into your account each month. 2. Log onto Online banking at least once every three months. 3. Must have two active debit cards. 4. You need to be over 18 and live in the UK. 5. Agree to paperless banking. |
What are the differences between Santander 123 and 123 Lite accounts?
The difference between the Santander 123 and 123 Lite account is the monthly cost, the interest rate, and a few eligibility requirements. For the Santander 123 account, you’ll need to pay double the amount each month to gain access to a 0.3% interest. For the 123 Lite, there are also more requirements to follow to be eligible for the card. However, these are very minimal, and I’m sure their additional requirements are something many people will do naturally.
How much money can you make on each account?
Let’s be honest, what we all really want to know is how much money each of them can provide us. A cashback account is excellent if you’re able to reach their max cashouts each month.
How much interest can you earn on the standard 123 account?
The maximum amount you can make on the Santander 123 account is £15.99 a month.
This assumes you hit the maximum threshold for each of the 1, 2, & 3% categories and have £20,000 in your account. We have also deducted the £4 monthly account fee.
How much interest can you earn on the 123 Lite account?
The maximum amount you can make on the Santander 123 account is £13 a month.
This assumes you hit the maximum threshold for each of the 1, 2, & 3% categories. We have also deducted the £2 monthly account fee.
What is the average cashback amount you can make on the 123 accounts?
As the cashback bonuses is mainly from bills, I’ve got the “average” bill prices relevant to British households and have shown them below.
| Bill | Monthly Cost | Cashback rate | Total Cashback (£) |
| Broadband | £30.30 | 1% | £0.30 |
| Mobile Phone | £45.60 | 1% | £0.46 |
| Gas | £56 | 2% | £1.12 |
| Water | £34.58 | 3% | £1.04 |
| Electrics | £58 | 2% | £1.16 |
| Council Tax | £122 | 1% | £1.02 |
| Total | £5.10 |
The total above doesn’t consider fees that are taken away. If you were to include the fees, the max you could potentially earn on: the Santander 123 account (with £20,000) will receive a total of £6.09 monthly. For the Santander Lite you’ll receive £3.10 each month.
For a more accurate amount, Santander has two handy calculators for both of these cashback accounts. You can view them both on the account pages on their website. You will find the calculators under the “Interest and cashback” drop-down.
It’s also worthwhile noting that the above doesn’t consider their cashback offer for selected retailers. When you open an account, you can also opt-in for their retailer offers. Here you’ll be able to gain up to 15% cashback from a variety of major retailers. With the likes of Costa, Sky, Morrison’s, Co-Op, and Just Eat, additional cashback can be made if you regularly purchase items from these businesses.
Can I switch from Santander 123 to 123 Lite?
Yes. You can switch from Santander 123 to 123 lite either through your online banking account, in branch, or by phoning Santander directly.
Which account should you pick?
The account you choose really does depend on how much you can leave in your account. If we use the data above, and you had a minimum of £20,000 in your account each month, you’ll earn a total of £73.08 per year with the standard 123 account. With the 123 Lite account with just the cashback and minus the fees, you’ll earn a total of £37.20.
So, which one should you pick? People with a balance over £8,000 should choose a Santander 123 account. This is because 0.3% of £8,000 is £2, so this neutralises the additional £2 that is added to your monthly fee. As you work and earn more each month, your holding figure will increase, allowing you to start making money off the interest and cashback.
However, if you have below £8,000 in your account that you can comfortably hold, I would choose the Santander 123 Lite. Anything below £8,000 in a standard 123 account will result in you making less money than if you were to select the 123 Lite.
Remember, all of the judgments are based on the graph created above. So, the cashback and interest rates that you’ll receive each month will more than likely be different.
James Banerjee is an Account Director who graduated from the University of Kent in 2014. He works in SEO on clients such as HSBC UK and Nestle and he has a keen interest in personal finances and money-saving advice.
