M&S to launch first fee-free current account

Published by Laura Whitcombe on 07 March 2014.
Last updated on 07 March 2014

M&S

M&S Bank is to launch its first fee-free current account this summer, with an interest-free £100 overdraft.

All M&S Current Account customers will automatically get a £500 overdraft, but after the interest-free first £100 of the facility is used up, interest of 15.9% AER will be charged on the remainder.

There are no unauthorised overdraft charges or fees for returning unpaid cheques or standing orders.

M&S Bank is also offering a golden hello to customers who switch to the Current Account using its Current Account Switch Service by giving them a £100 M&S giftcard.

Other perks of the new account include a free text alert service to warn them if they are approaching their overdraft limit; and no transaction fee for overseas ATM cash withdrawals made with the M&S debit card (although a foreign exchange charge of 2.75% will still apply).

Customers will earn loyalty points for using their debit card, earning one point for every £1 spent in M&S - in-store and online. They will then receive £1 in M&S vouchers for every 100 points earned and vouchers will be sent out each quarter.

So for every £100 you spend in M&S you will be rewarded with a £1 voucher. However, these vouchers are paid in lieu of any interest paid on credit balances.

Those who open the new account will also be eligible for exclusive offers on other M&S Bank products such as savings accounts and personal loans.

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Transparent banking

Colin Kersley, chief executive of M&S Bank, said: "Our Premium Current Accounts, developed specifically for the regular M&S shopper, have proven popular with this audience and following the launch of the Current Account Switch Service, which has made switching faster and easier, we want to offer the same transparent banking and great service to a broader audience with the launch of the M&S Current Account."

Andrew Hagger of Moneycomms.co.uk said the introduction of the M&S Bank Current Account could trigger a fresh rush of switching this summer.

"I think this deal has the potential to drive a lot of new custom from account holders with the big banks who have until now been sitting on the fence, not sure where to switch to for a better deal.

"This latest account is simple and transparent and has many positive features that should appeal to a wide range of consumers – in fact I'm struggling to find anything about it to dislike."

He pointed out that the interest-free £100 part of the overdraft is generous compared to some competitor accounts which only have "measly, charge-free buffers of £20 or less" and that the 15.9% EAR for the rest of the overdraft makes it "one of the most competitive on the market".

He added: "With Tesco Bank and Virgin Money also due to launch their bank accounts in the coming months, maybe 2014 will be the year that consumers finally have some worthwhile new options to choose from."

The new M&S Current Account will be available from the summer to existing M&S Bank customers before rolling-out more widely.

first direct 1st Account

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  • £100 signup fee - and £100 if you choose to leave after six months*
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