The packaged current account market has evolved in recent years, and for the better, with tighter regulation and increased competition keeping banks on their toes and in many cases delivering better value for consumers.
Fortunately, the sector has moved on from the unsavoury situation around 2010 to 2015 when these accounts came under the regulatory microscope following a spike in customer complaints and claims of mis-selling.
Providers will rightly continue to face scrutiny from the regulator and consumer groups, with the latter continuing to remind account holders to check whether their account represents value for money.
I’ve just carried out a review of the market on behalf of NatWest Bank and below you’ll find a summary of my research findings.
When comparing the different accounts, I’ve had to assume that the customer signing up for the account will use all the benefits included in the package.
Not all packaged current accounts are the same as the mix and level of benefits can vary widely between banks and accounts.
I’d recommend customers shop around, dig a little into the detail and pick an account based on their needs from a bank they can trust.
Standard packaged accounts
I looked at 16 different packaged accounts and to be able to make more meaningful comparisons, I split them into three categories:
· Basic (under £10 pm)
· Mid-range (Silver) (£10 to £15pm)
· Platinum (£17 to £23pm)
After comparing the features and benefits provided by each of the accounts I ranked the new revamped NatWest Silver account as the number one product based on breadth and value of offering.
More importantly, it’s the only account in the mid-price range (£10-£15pm) that offers the health and wellness benefits.
The Health and Wellness option is relatively new to the market and something that’s likely to prove popular, particularly as the NHS is so stretched. It’s almost a halfway house between NHS and going private.
Some of the newer banks have taken a different approach and for the most part have ignored the traditional car breakdown cover.
Looking at the platinum range accounts (£17 to £23pm) , I found that the Santander Edge Explorer account came on top, closely followed by NatWest Platinum.
In fact, of the 16 standard package accounts reviewed, only 2 products, namely Santander Edge Explorer and NatWest Platinum offer all 6 of the following core benefits:
- travel insurance
- car breakdown insurance
- mobile phone insurance
- health/wellness benefits
- cashback/monthly rebate
- free debit card purchases abroad.
Premier Packaged Accounts
The premier bank account rewards market is trickier to compare, as there is less of a standard style package on offer with most accounts requiring a qualifying salary level, typically £100k or Investments held £100k.
I compared the revamped Nat West Black Reward against the handful of similar premier current accounts.
The HSBC Premier account for example offers most of its benefits via the associated World Elite Credit card with a £290 annual fee.
Similarly, the Lloyds Premier Bank account, while it does offer the Bupa wellbeing feature it doesn’t offer a great deal else, however for a £15 monthly fee it still represents reasonable value. Particularly If you pay in £5,000 per month or have £100k in investments, as that will see the monthly fee waived.
Revolut Ultra was also included in my research, it is a high-end packaged account priced at £55 per month which appears to be aimed at a more niche market (hi tech frequent traveller/serious investor – according to its own website it offers up to £9,000 in annual benefits.
Having reviewed these products, my view is that NatWest Premier Reward Black offers a wide ranging, comprehensive package of key insurance and health/wellbeing related benefits that customers can rely on.
Priced at £39 per month it represents excellent value (if you use most of the included benefits), however the net monthly cost can be reduced by £9 per month just by having two monthly direct debits set up on the account.
For just £360 per year (net of £9 monthly reward) NatWest Premier Black Reward offers an unrivalled suite of solid benefits, no fluff, just things that customers and their children can benefit from, and all for the equivalent of less than a pound a day.
Black Reward account customers can also get the Reward Black credit card for free, as the annual £84 fee is refunded. The card gives you a generous 0.5% cash back on spend and 1% on supermarket food spend.
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