Is it worth paying for your current account?

Paid for or premium accounts cost on average £14.05 a month but do you need to pay for your current account? Nathalie Bonney takes a closer look at banks' latest moneyspinners.

The number of fee charging current accounts on the market is increasing.

The typical benefits they offer like travel and mobile phone insurance and breakdown cover seem like useful things to have.

But would you be better off using a free banking account and paying for these extras individually instead of the £10-15 monthly fee?

Take travel insurance offered by the banks: Experts say there are accounts that don't offer baggage or personal accident cover.

Other extras are certainly not essential. By law everyone is entitled to an annual credit report for just £2 so the unlimited access credit reports you get with premium accounts are a nice luxury rather than a must-have.

Banks will shut down your account and replace lost or stolen bank cards free of charge so paying for extra fraud and card protection is unnecessary too.

It's also tricky to work out the value of the added benefits. For example Lloyds'AA breakdown cover on its silver account is worth £56 according to its website but you can find the same level of cover for £28 on the AA's own site.

Undoubtedly there are occasions when value–added accounts are worth their monthly fees: some older account holders have found themselves unable to get appropriate travel insurance because of their age or state of health.

Even if the extras look useful the point is don't take them at face value – ask your bank for a breakdown of the costs and how much the extras are worth.

Also look and see if the overdraft or in-credit interest rates match up to a free account. 

Banks are pretty keen to promote these accounts but are they worth the extra £160 plus  a year? Don't let sales staff pressure you into paying for a product you don't need.

Your Comments

Thank you so much for finally providing transcript alongside your 'TV' articles.

I have paid £12.50 a month for banking for 5 years now. To me it has been worth it as I use the 'free' travel insurance, 'free' mobile phone insurance, 'free' car breakdown service, 'free' 5 year electrical product warranty and discounted rates on preferential banking services - better rates on loans etc and no fee currency exchange at very good rates, etc.. In all has been benefical and together with excellant customer service I have the best personal banking experiance in 25 years.

the comments saying it is value for money are obviously bank propaganda agents.rubbish.
paying monthly for nothing is a HUGE capital inflow to the mega organisations...
dont do it.

That last person sounds like a bank employee.....or am I being cynical ?

What about the convenience of never having to compare prices and renew at least 3 different policies per year?  Only having to manage and remember one direct debit rather than individual ones for travel insurance, phone insurance, breakdown cover etc? The time it takes to manage all the different service and when they need renewing etc would add up to hours every year - and working on a cost per hour of my time that's several months of bank fees paid for!  All this talk of whether its value for money or not is ridiculous - it's a rubbish article.  If you don't travel or drive it's likely to be poor value for money (so don't get one), if you do, especially if you value hassle free convenience, then it's great.  I'm with the Co-op on the privilege premier and it's fantastic - get discounts on my mortgage and loan plus the usual.  

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