From Monday 11 January, nearly four million 1|2|3 current account customers will be charged £5/month (£60/year), up from the current £2/month (£24/year) fee.

The near two million 1|2|3 credit card customers will also be hit with an annual fee rise to £36, up from the current £24 charge.

At the time Santander announced the fee hikes, it cited rising costs, low interest rates and the introduction of a cap on transaction fees for its unpopular move.

If you are one of the millions with Santander’s current account or credit card, now is the time to assess whether the products are right for you. If you’re best ditching it, see below for what options are available.

What are the benefits of the Santander 1|2|3 accounts?

First launched in March 2012, the current account pays customers 1% cashback on water bills, council tax and Santander mortgage payments, 2% on gas and electricity bills, and 3% on mobile and home phone bills, broadband and paid for TV packages.

In addition, customers receive 1% AER on balances over £1,000, 2% AER on balances over £2,000 and 3% AER on balances between £3,000 and £20,000.

For customers who took out a Santander credit card before 16 September 2015, it attracts 1% cashback on supermarket spends (no cashback limit), 2% in department stores (no cashback limit) and 3% on petrol, national rail and TfL spends (max £9/month).

However for those who took out the product from 16 September 2015, the cashback was capped to £3/month for each of the supermarket, department store and transport spends.

Check if it’s still worthwhile

Susan Hannums, director at independent savings advisers, Savingschampion.co.uk, gives the following example for the current account:

“If you have a balance of, say, £5,000 then you would receive £150 a year in interest before tax. If you took away the £60 fee you will pay for the account, you will still be left with £90 in interest, which is equivalent to 1.80% AER in interest for a year.

“Given that the very best rate available on an easy-access savings account is 1.65% AER with RCI’s Freedom Savings Account, this gives you an idea of why the Santander account should not be ignored for savers looking to improve their interest rates.”

However, both Savings Champion and price comparison and switching site uSwitch, rate TSB and Nationwide for those customers with smaller balances as there are no monthly charges.

The TSB Classic Plus Account pays 5% AER on balances up to £2,000 with a minimum £1 deposit, though you need to pay in a minimum £500/month to qualify.  Or the Nationwide FlexDirect current account also pays 5% AER, but on the first £2,500, with a minimum £1 deposit, though with a higher £1,000/month pay in to qualify.

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