You are here: Home - Insurance - News -

Consumers warned to question “added value”

0
Written by:
11/09/2008

Current account incentives cost consumers an average of £1.27 per month, according to research by financial research firm Defaqto.  

A total of 32 different incentives are currently on offer to those holding added value (paid for) current accounts, including travel insurance, identity theft insurance, card protection, commission free foreign currency exchange, cash back and will writing services.

David Black, principal consultant of Banking for Defaqto, said: “The banks are very keen to migrate their customers from free-in-credit current accounts to added value accounts as the latter provide them with an ongoing and guaranteed income stream. The carrot of incentives is the main method by which banks attract new customers to these accounts. Based on the monthly fees charged, Defaqto has calculated that each incentive costs the customer an average of £1.27 a month.”

Black added that some of the incentives offered, for example travel insurance, are of more value to consumers than others. But he maintained that deciding to transfer to a paid account should be based on whether you actually want the incentives offered. If you do, you also need to ensure you can’t buy said items more cheaply independently.

“Added value current accounts are being increasingly heavily marketed and there is already significant variance in the accounts offered with some providers differentiating between entry level, medium and premium offerings,” Black continued.

According to Defaqto, the average number of incentives offered by added value accounts is just over 11 and the monthly charge for an added value account varies from £3 up to £25. The average monthly cost of such an account is £14.24. NatWest’s Advantage Private Account offers the most incentives (26) and costs £19.95 per month.

Related Posts

Tagged:

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Flood advice for motorists

Motorists in flood hit areas could see their premiums rise by as much as 26% if they make a claim...

Close