Is the new Marks & Spencer bank account really worth £20 a month?
By Ruth Lythe for the Daily Mail
Published:19:14 EDT, 17 July 2012 |Updated:09:45 EDT, 18 July 2012
The newest bank on the High Street - Marks & Spencer Bank - has unveiled its first current account.
But customers face forking out up to £240 year for the privilege of banking with the retail giant and must ensure they pay in £1,000 a month. But is it worth the cost?
What are the perks?
As you would expect from M&S, the perks are great, and well targeted at their core shoppers.
There is worldwide family travel insurance for four people up to the age of 70 - though it can be stretched to the age of 80. The added benefit is that grandchildren are covered, too, which most policies won’t do.
Just like M&S Premium Club - the store’s popular loyalty card, which costs £15 a month - customers also get vouchers for the M&S Cafe and birthday gifts.
The current account has £45 worth of treats vouchers, too, £40 M&S vouchers and loyalty points when you use your debit card and credit card.
Plus you get access to a regular savings account, which pays 4.8 per cent (6 per cent before tax).
And there is a £100 interest-free overdraft of £100 and an automatic £500 overdraft limit.
Anyone who goes overdrawn will be sent daily text messages alerting them to their credit position.
And because this is M&S, you also get a debit card designed by Sir Terence Conran featuring iconic British images, such as the White Cliffs of Dover, a red London bus and a cup of tea.
How will it work?
The account is unveiled today, and the first M&S Bank branch opens tomorrow at M&S’s flagship store in Marble Arch, London.
M&S plans to open 20 in other branches by the end of the year, and have 50 open by the end of 2013.
Branches will be open when the shops are open. That means Sundays and late nights.
There is also a 24-hour, seven-day-a-week UK call centre and internet access.
The account won’t launch until October, but you can register for it from this week.
What are the charges?
The monthly fee. There are two accounts: one with travel insurance, costing £20 a month; and one without, costing £15 a month.
M&S says it has tried to make the account as simple
and transparent as possible so there are no other fees.
This includes no charges for bounced cheques, returned payments or going into the red. There are also no charges for spending or using a cash machine overseas.
However, there is interest to pay on the overdraft of 15.9 per cent. And overseas transactions still incur a 2.75 per cent loading charge — adding £5.50 to every £200 you spend abroad.
Is there a catch?
Some of the perks are not as good as they first seem. M&S Bank reckons the total value of the perks is up to £658 a year - but don’t be fooled by this.
Unless you plan to take your grandchildren with you, then you will be able to find an annual worldwide travel insurance policy elsewhere for about £60.
M&S says you can also get vouchers offering 20 per cent off for the first year. But these are valid only for one month on spends up to £250, and not on furniture, electrical items or food.
The rates quoted on regular savings accounts are also a bit of a trick, as what you can pay in is limited, and you get the full rate only for the first month (as that is the only month invested for the full year).
Will I qualify?
You have to be over 18 and pay in at least £1,000 a month. You must also be aged under 70 to qualify for the travel insurance.
If you want to move current accounts, there are some good deals on offer elsewhere on the High Street.
For customer service, First Direct, part of HSBC, usually comes out top. There is a monthly fee of £10 if you don’t pay in at least £1,500 a month.
Nationwide BS offers individual European travel cover with its Flexaccount, which does not have a monthly fee.
If you like the idea of getting worldwide family insurance, you can consider a paid-for account. The Co-op’s Smilemore account has worldwide family travel insurance and breakdown cover for £13 a month. It has a £260 interest-free overdraft.
The perks are excellent - but the price is high.
If you’re already a customer of Premium Club and paying £15 a month for that, then maybe you should consider switching.
However, the £20 a month fee is off-putting.
This is an account for the most loyal M&S shopper - if that’s not you, then you should really look elsewhere.
Category: Travel Insurance