According to research from MoneyExpert.com, packaged current accounts that charge a monthly operating fee are leaving many consumers out of pocket with miserly paybacks.
Despite costing the average customer £140 each per year, two-thirds of monthly fee current accounts are paying less than one per cent interest and overall, the accounts reward paying customers with an average rate of just 1.5 per cent.
Packaged banking products currently make up around a third of the market of current accounts, are offered by nearly half (14 of 30) of the high street providers but Sean Gardner, chief executive of MoneyExpert.com, says they are still not really pulling their weight.
"Packaged accounts are proving popular with customers and banks and are likely to remain so. However the average credit interest paid on accounts is not particularly impressive at 1.5 per cent so customers must really value the added extras," Mr Gardner said.
Banks clearly benefited from the format because they received a set monthly fee for operating the product, Mr Gardner explained, and he was reluctant to take issue with the 11 million or so customers with fee-paying daily banking accounts.
However, he did stress that customers should look carefully at the benefits of the services to ensure they were getting the best deal and that they were taking advantage of the additional offerings, because it was clear a better interest payment was not generally part of the deal.To read more about current accounts, click here.
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