Here we take a look at the some of the latest changes.
Changes to overdrafts
From October 2, Lloyds TSB and the Bank of Scotland are set to introduce or increase interest and fee-free amounts on planned overdrafts across their full range of mainstream current accounts.
This means customers could avoid incurring any charges should they dip into their planned overdraft at any point in the month.
Subject to approval, customers will be able to benefit from the introduction of an interest and fee-free planned overdraft of £25 on the Classic account which has no monthly fee, and of £50 on the Silver account.
They will also benefit from an increased interest and fee-free planned overdraft amount of £150 on the Gold account – up from £100 at the moment – and an overdraft of £300 on the Platinum account – up from the current £250.
However, from the same date, Lloyds TSB and the Bank of Scotland will also be increasing overdraft interest rates and the monthly overdraft usage fee across their range of free and paid-for current accounts for customers who exceed their interest and fee-free facility; the Bank of Scotland will also increase the monthly fee on its Silver and Gold Value Added accounts.
Meanwhile, customers with Added Value accounts will see a number of enhancements including improved travel insurance cover to include travel disruption cover, and improved Sentinel Card Protection Cover.
Both Lloyds TSB and the Bank of Scotland already offer a variety of benefits for current account customers, including an in-credit rate of up to 3% through Vantage, as well as a range of features on their Added Value accounts.
What else is out there?
If you don’t use your overdraft and stay in credit, why not benefit from an account that rewards you for using it?
Santander’s 123 account pays 1% on balances of more than £1,000, 2% on balances of more than £2,000 and 3% on balances of more than £3,000 to a maximum of £20,000 – although there is a £2 monthly fee.
In addition, you get 1% cashback on your water and council tax bills from the account, 2% on gas and electricity bills, and 3% on mobile, home phone, broadband paid-for TV packages.
The end of bank cards?
Elsewhere this week, RBS and NatWest launched a mobile banking app enabling people to take cash from an ATM without the inconvenience of having to carry a debit card.
From June 13, customers with the RBS and NatWest mobile banking app can take money from an ATM by making a request on their mobile phone through the GetCash service.
This generates a six-digit code number which you can then tap into a cash machine; the amount of cash to be withdrawn is confirmed, and the machine then pays out.
The aim is to help people who may have lost or forgotten their card or who want to leave their purse or wallet at home, and can also be used to allow people to send cash quickly to family members.
The service works at NatWest and RBS ATMs, and you can use it as many times a day as you need to, up to a limit of £100 per transaction/withdrawal.
The scheme is available to around two and a half million customers who already have the app on their phone.
The end of free banking?
These latest developments come as Barclays announces it is changing its current account offering, replacing all its packaged accounts with just one that allows customers to add on a selection of extras – known as “packs.”
To add “packs” to your account, you simply log on online, and drag them into your account, and to remove them, you can drag them out again, and charges will stop.
While some of the packs are free of charge – such as savings products and an overdraft, if you qualify – if you opt for more sophisticated features, you will have to pay for the privilege.
Prices start from £6 a month for the Home Pack which provides cover for your satellite and TV equipment, extended warranties on domestic appliances, a trouble-shooting service for your PC, a concierge service, and a legal and tax helpline.
Opt for the slightly more expensive Travel Pack at £8.50 a month, and you will also get RAC roadside and At Home assistance, European family travel insurance and card protection.
This move by Barclays follows in the footsteps of First Direct which now charges £10 a month for its current accounts.
The exception to this is for First Direct customers who already hold another product with the bank, such as a mortgage, credit card or savings accounts – or who pay in £1,500 a month; for these customers, the account is free.
Time to start banking at your supermarket?
Elsewhere, M&S has just announced that it is to begin offering bank accounts in its stores, with the first of 50 branches scheduled to open at the flagship Marble Arch store.
The new branches will offer current accounts as well as existing products such as savings accounts and cash ISAs.
The branches will be open at normal store operating hours, seven days a week – putting M&S ahead of most of its banking competitors.
This is an addition to the convenience of a “one stop shop” for consumers that already shop with M&S.
New findings from analyst Retail Banking and Consumer Insight show 68% of consumers see a convenient branch near work or home as an essential feature of their current account provider.
Analysts also say that while M&S is unlikely to challenge the high street banking giants, it could acquire a profitable base of prime consumers from its existing customers.
Further to its branch presence, M&S Bank will also offer online banking and UK-based call centres.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct