Packaged current accounts are they good value for money?

                                                                                         

Most UK banks offer a packaged current account are these accounts really good value for the monthly fee incurred and will any of these accounts really offer you a better service than a ‘normal’ current account.

It seems quite good at a glance; you pay up to £25 for what’s called a ‘packaged’ current account. These accounts offer a better interest rate, maybe some benefits and better rates on overdrafts and lower fees etc. However all is not as it seems…

As we’re waiting to hear the result of the OFT’s High Court case regarding banks overcharging customers for things like overdraft fees and so on, free banking for all of us could soon be a thing of the past. The ‘packaged’ current account may be forced upon us all!

The so called benefits package on a packaged current account varies from bank to bank but also by how much you’re willing to pay each month. For example the account might offer motor breakdown cover, mobile phone insurance and travel insurance. They should also offer better rates on other products they offer at the bank.

At first glance these all seem like great offers but you need to look at the terms and conditions behind each benefit before making your decision. Some of the motor breakdown policies only cover you up to a certain distance from your home address, another point is, how likely are you to loose your mobile?

6 of the main UK high street banks offer some of the lowest rates of credit interest on a current account today. What’s more is 3 of the same banks charge amongst the highest fees for authorised overdrafts.

If we do get forced into a market where the banks charge us a monthly fee for our current accounts then I’m afraid there’s nothing much we can do about it. It will be interesting to see what the banks put forward as the first range of fee charging current accounts. Personally I’m not interested in paying for additional services like travel or motor breakdown insurance, I’m perfectly capable of sourcing additional products like that myself and you never get anything for free. If it seems to good to be true it usually is!

About the author:
Simon Duffy writes for the Financial Blog a UK Finance Blog talking about all aspects of personal finance including loans blogs, credit cards blogs, tenant loans, credit cards blogs, mortgages blogs,

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