Santander is to massively increase the annual fee on its hugely popular current account from £24 a year to £60 a year.
Santander has confirmed that it is increasing the monthly fee on its 123 current account from £2 a month to £5 a month from January, an increase of £36 over the year.
The hugely popular account offers an interest rate of up to 3% depending on your balance and cashback on certain direct debits.
Reza Attar-Zadeh, head of retail products at Santander, said: “External market factors mean we’ve had to make some changes to ensure the products continue to meet the needs of our customers, but also our shareholders. We’re writing to all our existing 123 customers and making sure we help them understand the changes and the options available to them.”
[Related story: Halifax ups reward for switching to its current accounts]
Get more from your current account
With banking with Santander set to cost far more, there are plenty of banks that will pay you to switch to them and offer other perks.
Clydesdale and Yorkshire banks will pay £150 while Halifax and First Direct will both give you £125 on their leading current accounts. The Co-operative Bank will reward you with £100 and give £25 to a charity of your choice.
M&S Bank is a little different in that it’ll give you a £100 M&S gift card instead of cashback.
Other banks will give you cashback for shopping at selected retailers. NatWest and RBS offer Cashback Plus which gives you a minimum of 1% back to turn into cash or vouchers.
Barclays pays £7 a month on its Blue Rewards scheme as long as you deposit £800 a month, have two direct debits set up and sign up to online or mobile banking. However, there is a £3 monthly account fee, so you’ll only actually get £4 a month.
If you are turned off by Santander's bigger fee, but still want to enjoy a high rate of interest on your balance, there are a few options too.
The Nationwide FlexDirect account pay 5% interest on balances up to £2,500 for the first 12 months while the TSB Classic Plus account gives you the same on balances up to £2,000, but without the teaser period.
Tesco Bank pays 3% on balances up to 3%, Bank of Scotland Classic Current Account with Vantage offers the same on pots between £3,000 and £5,000 and Lloyds Bank pays 4% on balances from £4,000-£5,000.