Bank accounts which bundle in other products in return for a monthly fee vary very widely in terms of services, a new report shows.
New analysis on so-called "added value" bank accounts was published by Defaqto today.
The data firm found that there are 32 different incentives from these accounts currently on the market. Added value accounts work by offering customers inducements such as insurance, card protection, a legal helpline and preferential rates on loans, in exchange for a monthly fee.
However, Defaqto found that these inducements cost customers an average of £1.27 each every month. The value for money that the various services represent was also found by the firm to vary widely.
Some inducements, such as travel insurance, were found to be comparatively cheap when purchased through an added value account. Nevertheless, Defaqto pointed out that many of the services could be bought elsewhere for less money.
David Black, principal consultant of banking at the firm, commented: "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."
He added: "For the consumer the main decision on whether to transfer to a paid for account should be based on whether they actually want the incentives offered and, for those that they do want, whether they can buy those items that they actually require more cheaply independently."
The most expensive monthly charge found by Defaqto was from Citibank, which levied a fee of £25 for its Citigold Current Account. The cheapest was Barclays' Current Account Plus at £3, although the nature of the incentives varied widely between the two.
