Why M&S current account won't appeal to everyone

M&S Money has confirmed details of its hotly anticipated Premium Current Account.

M&S is due to open its first bank branch this month, though the account will not be officially launched until October.

What's most interesting is that the account is a packaged current account, carrying with it a monthly fee. M&S has confirmed that after speaking to its customers, the feedback suggested a packaged current account was what they were looking for.

The M&S Premium Current Account
So what do you get with the M&S Premium Current Account?

• In return for a monthly fee of £20, the account gives you:
• Worldwide multi-trip family travel insurance, including winter sports
• More than £500 worth of annual benefits, including M&S vouchers, hot drinks vouchers for M&S Café, a birthday gift and seasonal treats four times a year
• 12 vouchers for 20% off M&S shopping in the first year
• Loyalty points on debit card purchases made at M&S
• £500 overdraft, with the first £100 interest-free
• No charges for ATM use abroad
• Exclusive access to a regular savings account paying 6%

There is also a version without the insurance included which will set you back £15 a month.

Clearly, the M&S Premium Current Account is going to appeal to those who do a lot of travelling, due to the insurance and absence of charges for overseas use. There is also a nice focus on loyalty, with the vouchers and reward points.

However, the account is really expensive. You'll be shelling out £240 a year for the M&S Premium Current Account - a vast amount for a bank account. Obviously, if you shop in M&S a lot and are likely to make use of all of the benefits of the account, that may not seem such a bad deal. But it's certainly not a mainstream option.

• Compare packaged current accounts

The pros and cons of packaged current accounts
Packaged current accounts offer the holders a series of additional benefits with their account, in exchange for an annual fee.

It can be a little tricky to compare them, as everyone is different - the deals offered on one account may represent cracking value for money for me as I am likely to make use of all of the extra features. But that doesn't mean that the account is right for you.

That's one of the reasons that the FSA is investigating the sector, as there are concerns they may have been mis-sold.

One exception to the rule is the Barclays Bank Account. The account lets you add the exact extra features that you actually want, so you don't pay for anything you don't need.

• Tired of your bank? Switch current accounts

Do you need to pay for your current account?
However, there are plenty of current accounts that offer you a decent package, without charging you a monthly fee for the privilege.

For example, the Nationwide FlexAccount is a free account and offers free European travel insurance, while the Co-operative Current Account Plus offers a £200 fee-free overdraft.

And if the only thing you are worried about is a decent level of customer service, there's the First Direct 1st Account, which is free so long as you pay in £1,500 a month or have another First Direct product.

What do you think? Does the Premium Current Account appeal to you? Are you disappointed M&S will not be offering a more mainstream current account? Would you ever pay for a current account? Let us know what you think in the comments section below.

• Switch to a new current account today
• Compare tax-free cash ISAs
• Compare all savings accounts