Go Direct News - Are packaged current accounts worth the money?

Are packaged current accounts worth the money?

“The majority of the banks offer packaged current accounts, but are these accounts really worth the monthly fee and do any of these accounts offer a better deal than the standard current accounts?

Michelle Slade, analyst at Moneyfacts.co.uk comments:

“With us all currently waiting on the outcome of the OFT’s test case in the High Court with banks over charges and with speculation rife that free banking may be a thing of the past if the OFT wins, packaged current accounts may become increasingly popular.

“In exchange for a monthly fee of up to £25 packaged current accounts usually offer better credit interest and authorised overdraft rates as well as a benefits package, but this isn’t always the case.

“The accounts from Barclays, Citibank, Co-op, NatWest, Royal Bank of Scotland and Yorkshire Bank pay some of the lowest rates of credit interest on the market. Lloyds TSB, along with NatWest and Royal Bank of Scotland, also charge some of the highest rates for an authorised overdraft.

“The benefits packages on these accounts vary from bank to bank and also by how much you pay each month. Typically they offer worldwide travel insurance, car breakdown cover, mobile phone insurance and preferential rates on other products available from the bank.

“These benefits can be quite attractive but only if you take full advantage of them, so make sure you register for them and make sure they fully meet your needs. How beneficial is car breakdown cover if it only covers you on a limited distance from your home? Alternatively, how often do you lose your mobile phone?

“From 1 May, Lloyds TSB will increase the monthly fee on its Gold Service and Platinum current accounts by £2 per month to £12pm and £17pm respectively. In return for the additional fee, account holders will receive an increased mobile phone insurance cover up to £2K, ‘save my numbers’ – which backs up customer numbers in their mobile phone and Airmiles if customers book holidays through the Lloyds TSB Travel Service.

“The £1 foreign usage retail transaction charge will also be scrapped on Platinum and Premier accounts. However, this charge is one that majority of other banks and building societies don’t make.

“By transferring to one of the best buy current accounts you could not only save up to £300 through not paying the fee but in the case of Alliance and Leicester’s Premier Direct current account you will receive 8.19% on balances up to £2.5K. The savings you make will more than likely pay the cost of buying some of these benefits independently.”

Institution	Account Name	Account Fee	Credit Interest	Authorised Overdraft Rate	Benefits
Alliance & Leicester	Premier Direct Current	£0	8.19%* payable on balances up to £2.5K, 0.10% thereafter	0.00% fee free for 12 months then 50p per day authorised overdraft used, max £5 per month	Preferential rates on savings, credit cards, investments and mortgages
Barclays Bank	First Additions	£6.50 pm	0.10%	9.9% (Interest and fee free buffer up to £100)	Gadget insurance, mobile phone insurance, cardholder protection, legal helpline and online discounts at attractions and retailers
	Additions	£11.50 pm	0.10%	9.9% (Interest and fee free buffer up to £250)	As First Additions but also includes domestic emergency cover, children’s health cover, accidental death benefit, RAC Roadside and At Home cover, will writing service and extended warranty for appliances
	Additions Plus	£14.50 pm	0.10%	9.9% (Interest and fee free buffer up to £250)	As Additions but RAC cover is comprehensive and also includes worldwide travel insurance, access to Marketmaster from Barclays Stockbrokers
Citibank	Citibank Plus	£10 pm	0.10%	9.9% (Interest and fee free buffer on first £500)	Preferential savings, dedicated personal manager, card and identity theft protection, mobile phone insurance and worldwide travel insurance
Citibank	Citigold	£25 pm #	0.10%	9.9% (Interest and fee free buffer on first £500)	Preferential savings, dedicated personal manager, card and identity theft protection, mobile phone insurance, extended warranties, purchase protection, travel concierge service and worldwide travel insurance
Co-operative Bank	Privilege	£8.50 pm	0.00%	12.9% (Interest and fee free buffer on the first £100)	Preferential utility rates, legal helpline, discounts at selected stores, discounts on holidays, free worldwide travel insurance and commission free travel money
HSBC	Bank Account Plus	£12.95	7.72%** payable on balances up to £1K, 2.47% to £2.5K 0.10% thereafter	Introductory rate of 8% for 12 months, reverts to 16.1% thereafter. £25 arrangement fee payable (Fee free buffer up to £10)	Preferential savings, mortgages and utility rates, discounts on green products, discounts on shopping and entertainment at selected places, price promise, worldwide travel insurance, hotel discounts and commission free travel money
HSBC	Premier	£0 (but must have income of £75K pa to be mandated to the account	Up to £10K – 0.01%, Up to £50K – 1.15%, Up to £100K – 1.90%, £100K plus – 2.20%	9.9% (Interest free buffer up to £500)	As above but also includes preferential credit card and investments, dedicated relationship manager, discounts on hotels and flights and emergency travel services
Halifax	Ultimate Reward Current	£10 pm	6.00% payable on balances up to £2.5K, 0.10% thereafter	13.35% (Transferred accounts offered 0% for 120 days)	Preferential rates on savings, loans and mortgages, discounts on car and home insurance, card protection, mobile phone insurance, breakdown cover, worldwide travel insurance and commission free travel money
Lloyds TSB	Select Plus	£7 pm (£2 for first 3 months)	4.17% payable on balances up to £2.5K, 0.10% thereafter	17.3% (Interest free buffer up to £50)	Preferential savings rates, card protection, mobile phone insurance, breakdown cover, home shopping service and holiday service
	Silver Current	£7.95 pm (£2 for first 3 months)	0.10%	18.9%	Card protection, mobile phone insurance, breakdown cover, travel insurance, money transfer card and commission free travel money
	Gold Service Plus	£12 pm (w.e.f. 1.4.08)	4.17% payable on balances up to £2.5K, 0.10% thereafter	16.8% (Interest free buffer up to £50)	Card protection, mobile phone insurance, breakdown cover, home shopping service, travel service and ‘save my numbers’
	Platinum Plus Current	£17 pm (w.e.f. 1.4.08)	4.17% payable on balances up to £2.5K, 0.10% thereafter	10.4% (Interest free buffer up to £250)	Card protection, mobile phone insurance, breakdown cover, home shopping service, travel service and ‘save my numbers’
	Premier Plus Current	£25 pm (£15 for first 3 months)	4.17% payable on balances up to £2.5K, 0.10% thereafter	10.4% (Interest free buffer up to £500)	As Platinum Plus current but also includes will writing service, home emergency cover, discounts on electrical goods, travel discounts and services
NatWest	Advantage Gold	£12 pm	0.25%	Up to £1K – 18.59%, Up to £5K – 18.19%, £5K Plus – 16.56% (Interest free buffer up to £100) (Arrangement fee of 2%, min £30 payable on overdrafts over £7.5K)	Preferential loans, credit cards and mortgages, death cover, discounts on home and car insurance, purchase protection, mobile phone insurance, identity theft insurance, extended warranties, discounts on going out, travel discounts, worldwide travel insurance and commission free travel money
NatWest	Advantage Private	£18.50 pm	0.50% payable on balances up to £25K, 1.00% thereafter	11.99% (Interest free buffer up to £250) (Arrangement fee of 1%, min £30 payable on overdrafts over £15K)	As above but also includes preferential savings and investments, dedicated financial manager, legal discounts, handbag or gadget cover, breakdown cover and travel service.
Royal Bank of Scotland	Royalties	£6 pm	0.15%	Up to £1K – 18.25%, Up to £5K – 17.85%, £5K Plus – 16.25% (Interest free buffer up to £100) (Arrangement fee of 2%, min £30 payable on overdrafts over £15K)	Preferential savings, loans, credit cards and mortgages, death cover, discount on home insurance, card protection, mobile phone insurance, breakdown cover, discounts on going out and travel discounts
	Royalties Gold	£12 pm	0.15%	Up to £1K – 16.35%, Up to £5K – 15.65%, £5K Plus – 14.55% (Interest free buffer up to £250) (Arrangement fee of 2%, min £30 payable on overdrafts over £15K)	As Royalties but also includes preferential utilities, emergency helpline, extended warranties, discounts on shopping and preferential travel services
	Royalties Premier	£15 pm	Up to £5K – 0.15%, Up to £10K – 0.30% £10K plus – 0.50%	Up to £1K – 11.40%, Up to £5K – 10.90%, £5K Plus – 10.50% (Interest free buffer up to £500) (Arrangement fee of 2%, min £30 payable on overdrafts over £15K)	As Royalties Gold but also includes legal discounts, medical cover discounts, lifestyle manager service and worldwide travel insurance
	Royalties Private	£18 pm	Up to £5K – 0.25%, Up to £10K – 0.40% £10K plus – 0.60%	Up to £1K – 11.15%, Up to £5K – 10.65%, £5K Plus – 10.25% (Interest free up to £500) (Arrangement fee of 2%, min £30 payable on overdrafts over £15K)	Preferential savings, loans and mortgages, death cover, card protection, mobile phone insurance, mobile phone insurance, home emergency service, identity theft protection, tax discounts, technical cover, extended warranties, discounts on going out, travel discounts, worldwide travel insurance and travel service
Smile	Smilemore	£10 pm	2.75%	11.9% (Interest free up to £260, fee free up to £500) (£20 arrangement fee payable)	Preferential utility rates, breakdown cover, discounts at selected stores, travel insurance, travel discounts and commission free travel money
Yorkshire Bank	Current Account Plus Private Offset	£12.50	0.10%	12.95%	Preferential savings, dedicated financial manager, access to financial solutions centre and worldwide travel insurance
Source Moneyfacts.co.uk – 18.2.08

* Introductory rate until 30.04.09
# Fee waived if customer maintains average relationship balance over £50K or has Citibank International Personal Bank relationship or holds at least £25K of investments in Citibank
** Introductory rate for 12 months

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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