Santander customers FUME over ‘disgusting' £120 fee for key bank account after being promised it would be ‘free forever'
CHARGED UP Santander customers FUME over 'disgusting' £120 fee for key bank account after being promised it would be 'free forever'
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SANTANDER customers are outraged after the bank revealed it will start charging £120 a year for an account it promised would be "free forever".
Thousands of small business and self-employed account holders are facing £9.99 monthly charges from October.
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Several other banks, such as Virgin Money, Monzo, and Co-operative Bank, continue to offer free business banking
Credit: Getty
This comes despite written assurances that their accounts would always remain free of fees.
Santander's move has left customers feeling betrayed.
Customers have taken to social media to vent their anger.
One user said on X.com: "Promised me free business banking forever in writing, and now they want to charge £9.99 a month. Is this even legal?"
Another branded the move "absolutely disgusting".
The changes will impact three types of business accounts: 1|2|3 Business Current Accounts, Business Everyday Current Accounts, and Business Current Accounts.
Santander said that the "free forever" promise only applied to accounts offered by Abbey and Alliance & Leicester before their 2008 merger.
The bank first attempted to introduce fees for these accounts in 2012 but backed down after customers threatened legal action.
However, these accounts were shifted to the Business Everyday account in 2015, which did not include the "free forever" promise.
From October 1, these accounts will be closed, and customers will be automatically switched to Santander's new Business Current Account – Classic.
Switch bank accounts for free perks
This migration comes with new fees and charges that could significantly impact businesses, especially those handling large cash deposits or relying on cheque transactions.
Under the new structure, every Business Current Account – Classic will incur a £9.99 monthly fee, regardless of the type of account customers previously held.
While some accounts were free, others offered additional benefits with charges as high as £40 per month.
Several other companies, such as Virgin Money, Monzo, and Co-operative Bank, offer free business banking.
A spokesperson for Santander said: "The business banking landscape has changed significantly over the last decade.
"As such, we are simplifying our business banking offering as the first step to ensure that we can sustainably and efficiently evolve to better meet the needs of our business customers in the future."
Santander Business Current Account – Classic charges
SANTANDER has also revised other charges that could hit businesses hard.
For example: Cash deposits : Free up to £1,000 per month via Santander cash machines, but £1.25 per £100 for anything over that. Deposits made at Santander branches or Post Office counters will also cost £1.25 per £100.
: Free up to £1,000 per month via Santander cash machines, but £1.25 per £100 for anything over that. Deposits made at Santander branches or Post Office counters will also cost £1.25 per £100. Cash withdrawals : Free at Santander cash machines, but £1.25 per £100 withdrawn at branch counters or Post Office counters.
: Free at Santander cash machines, but £1.25 per £100 withdrawn at branch counters or Post Office counters. Cheque deposits: £0.70 per cheque. Overdraft fees are also set to change, adding further financial strain for some customers.
What else is happening at Santander?
The bank is closing its 123 Lite current account, which offers up to 3% cashback on household bills for a £2 monthly fee, on August 21.
Customers affected by the closure will be automatically switched to Santander's Everyday Current Account.
This account has no monthly fee but does not include cashback benefits.
The 123 Lite account has not been available to new customers since 2022, however, hundreds of thousands still rely on the current account.
The 123 Lite account allowed bill payers to earn up to 3% cashback, capped at £15 per month, on expenses like council tax, mobile phone bills, energy, and water.
However, if you still have a 123 Lite account, cashback will stop automatically, and you will no longer need to pay the £2 monthly fee from August 21.
If you're looking to keep cashback perks, the Everyday Current Account you'll be switched to won't be suitable, as it doesn't offer any cashback features.
Instead, customers who want to stay with Santander may want to explore the Edge or Edge Up accounts.
The Santander Edge account offers 1% cashback on certain household bills and debit card spending at supermarkets, petrol stations, and on travel.
This account has a £3 monthly fee, with cashback capped at £10 per month.
For a higher cashback limit, the Santander Edge Up account costs £5 per month and allows you to earn up to £15 per month on both bills and debit card spending.
To keep these accounts active, Edge customers must deposit at least £500 per month, while Edge Up customers need to deposit £1,000.
However, from September 9, cashback on supermarket, fuel, and travel spending will be removed for both accounts.
Customers will only continue to earn 1% cashback on household bills like council tax and utilities.
If you're looking to maximise your cashback, there are other options available.
For example, American Express' Cashback Everyday Credit Card offers an impressive 5% cashback on purchases for the first five months (up to £125).
What is cashback?
CASHBACK is a type of reward offered by banks, credit card providers, and retailers where customers receive a percentage of their spending back as cash.
Essentially, it's a way to earn money while making purchases.
For example, if your card offers 1% cashback and you spend £100, you'll earn £1 back.
Cashback can be credited to your account, deducted from your balance, or saved up for future use, depending on the provider's terms.
It's often offered on everyday purchases, such as groceries, fuel, or online shopping, and may be part of a promotional deal or an ongoing benefit of your account.
However, remember to check the terms and conditions, as some transactions may not qualify for cashback rewards.
By using cashback offers wisely, you can usually make your money go further on purchases you'd already be making.
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