Beware current account incentives | Moneywise
Customers with incentives linked to their current accounts aren’t getting value for money, new research has claimed.
According data provider Defaqto, there are 32 different current account incentives on offer, from home insurance to concierge service. Such incentives are normally attached to fee-based current accounts, which cost consumers an average £1.27 each per month.
The average fee-based account (also known as added value) includes 11 airport lounge service.
However, Defaqto says they do not represent value for money.
"Banks are very keen to migrate their customers from free current accounts to added value accounts as the they provide them with a guaranteed income stream,” says David Black, principal consultant of banking for Defaqto “[But] consumers need to base their decision on whether they actually want the incentives offered and whether they can buy those items that they actually require more cheaply and independently.
"For example a preferential rate may be offered on a savings account, but it is quite possible that a better rate will be available elsewhere."
Samantha Owens, head of cards and loans at data provider Moneyfacts agrees. “If you are choosing to an added value account, also remember to weigh up whether or not you will actually use the incentives too.
"So make sure you register your mobile phone if you are offered mobile cover, and check to see that your travel insurance covers your specific circumstances. Getting value for money will vary from person to person.”
What’s on offer?
Defaqto’s research that there is a significant variance in the accounts offered with some providers differentiating between entry level, medium and premium offerings.
Barclays Current Account Plus
