Santander-owned bank Abbey has announced the launch of the Reward Bank Account, a new packaged account available via branches, that offers both new and existing customers some eye-catching incentives, for a monthly fee of £10.
Abbey claims the suite of benefits on the Reward Account, which includes annual worldwide family travel insurance (for two adults and up to four children under the age of 21), Green Flag motoring assistance and identity protection is worth more than £400 a year, making the £120 annual fee seem like good value. In addition, customers will also receive 6.0% interest on balances in credit (up to £2,500 - you earn just 0.1% above that), which is fixed for 12 months.
However, as with all packaged accounts, the monthly fee is only worth paying if you'll make use of the benefits. If you will, it could prove a real money saver, but if you won't, you'd be better off opting for one of the great free-current accounts available.
What's on offer?
If you decide a packaged account is the way to go then you'll need to find a deal that offers benefits that are most accurately tailored for you.
In addition to the Abbey Reward Bank Account, Santander also offers the Premier 50 Account this time through its Alliance & Leicester (A&L) brand. This account is only available to those aged 50 and over and matches the Abbey deal in terms of rate with 6.0% interest on balances up to £2,500 for one year, after which it reverts to 1%. It too charges a £10 a month fee and includes benefits such as annual worldwide travel insurance up to the age of 79; health benefits including access for up to two out-patient private consultations and up to £750 worth of out-patient diagnostic testing; and identity protection.
The Halifax Ultimate Reward Account includes worldwide travel insurance, breakdown cover and commission-free foreign currency. However, the monthly fee is higher at £12.50 and the initial in-credit rate is lower at 2.50% on balance. That said this is a long term rate of interest, not just an introductory offer so after the first year, you'll earn more with this account than with the A&L or Abbey accounts.
Lloyds TSB meanwhile has four different packaged account propositions. Its Silver Account is the most basic available costing £3 a month for the first two months and £7.95 a month thereafter. It incorporates AA breakdown cover, mobile phone insurance and European travel insurance. The company then offers three accounts all of which offer an interest rate of 2.5% up to £2,500 and 0.1% thereafter: the Gold Plus Account £7.95 a month for the first two months, £12 thereafter; the Platinum Plus Account for £12 a month for the first two months, £17 thereafter; and the Premier Plus Account at £17 a month for two months and £25 a month thereafter. The Premier includes worldwide travel insurance with family and winter sports cover, home emergency cover, airport lounge access and more.
What if you don't want to pay a fee?
If you don't want to pay a fee for additional benefits then shop around for the best current account for you based on whether you are traditionally in the red or in the black.
Those who are regularly overdrawn should consider the A&L Premier Direct with an interest free overdraft for 12 months after which you pay 50p a day for every day you are overdrawn up to a maximum of £5 a month. The Abbey (Preferred Overdraft Rate) Account also offers an interest-free deal for 12 months providing at least £1,000 is credited into the account each time.
Those in the black meanwhile, should base their account choice on how high their balance is. The Halifax Reward Account pays a flat £5 for each month you put £1,000 into the account, while A&L's Premier Direct has a rate of 6.0% up to £2,500. For more tips read our article 'Earn up to 6% on your current account' and to compare products use our current account comparison tool.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing. Products underlined can be applied for directly.
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