Beware of 'Packaged' Bank Accounts - Instead, Check Out These Excellent Bank Accounts
August 2005
Marketing over substance would describe HSBC's latest attempt to try and sign up clients to its Plus Current Account. The bank is offering a free night in a luxury hotel for any existing client who upgrade to a Plus account.
- The Plus account also offers free worldwide travel insurance, commission-free foreign exchange currency and holiday and hotel discounts
- The bank claims the package is worth a laughable £600 a year, but
- a) family travel insurance is very competitive these days and can be got for about £80-£100
- b) maybe the currency is commission free but then the exchange rate is most probably lousy so cancelling out any advantage, and
- c) we'd bet the holiday/hotel discounts can easily be beaten by using the internet
And to add insult you've got to pay £12.95 a month or £155.40 yearly for the account!
Bank Accounts - A Rule Of Thumb
- Basically never believe the marketing when it comes to a bank account that forces you to pay a monthly subscription
- Instead it's far better to source each and every added service yourself
- For example, buy the travel insurance from a specialist, buy your FX currency from a company that offers very competitive rates including no commissions like www.travelex.com
The excellent magazine Which! also reveals that in their survey that 4/10 consumers who pay for packaged accounts use none or only 1 of the features.
So What To Do
- Forget about packaged bank accounts
- Source your needs out individually
- Get a bank account that can actually make/save you money without having to pay a monthly subscription such as the Alliance & Leicester Premier Account, details below.
The Best Buy Bank Account - Alliance & Leicester
- The Premier Plus account pays 5% interest on balance up to £2,500, contrast this with most banks paying 0.1% (yes, that's right, 0.1% it is not a typo)
- Premier Plus then pays 0.1% on balances above £2,500 so if just make sure you can easily switch excess money into a high paying deposit account
- You need to be earning £15,000+ to qualify for the account (or £6,500 pa for the Premier Account)
- The account also comes with a one-year interest free overdraft agreement
- A nice bonus is you get £25 in FREE cash for signing up online - Click Here for more details
Note, that switching a bank account is very easy these days, it's certainly not like the old days and a nice feature is an automatic transfer of all your standing orders and direct debits.
Summary
Don't pay for a bank account pure and simple because those accounts are setup to favour the banks bottom line rather than you the client.
Instead go with a free banking account that offers real benefits such as great rates of interest, competitive (sometimes even free) overdraft levels etc. And if a bank tries to tempt you with other offers such as travel insurance just spend 5 mins on the web to see how much of a discount you can really get, you'll likely be surprised.
See Also
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