M&S Bank launches fee-free current account
M&S Bank has launched its first fee-free bank account, which offers a host of incentives.
M&S Bank has launched its first current account which doesn’t come with a monthly fee.
The M&S Current Account offers an automatic £500 overdraft (the first £100 of which is interest free). It should also prove popular with travellers as there is no fee for using an ATM abroad, although you will be charged 2.75% for any purchases in a foreign currency made using the card.
What’s more, the M&S Current Account offers account-holders the chance to earn loyalty points when they shop with M&S. One point is earned for every £1 spent, whether in-store on online. For every 100 points earned, you get £1 in M&S vouchers, which are sent out every quarter. There's also access to exclusive offers on certain products.
And if you switch your main current account over from another bank and building society you’ll receive a £100 M&S gift card.
Will it be popular?
As with its fee-charging current accounts, it’s clear to see that the M&S Current Account has been designed to appeal specifically to people that shop regularly in M&S. However, its fee-free overseas withdrawals and competitive overdraft deal means it may prove alluring to non-M&S shoppers too.
That said, there are other fee-free current accounts out there that are also worth a look.
Compare current accounts with lovemoney.com
Best fee-free current accounts for interest
One thing the M&S Current Account doesn’t do is reward you with interest if your balance is in credit. By contrast, there are two fee-free current accounts currently paying a rate of 5%, more than you’ll even get with a traditional savings account.
The TSB Classic Plus Current Account pays 5% AER on balances up to £2,000. All you have to do is pay in £500 a month and register for internet banking and paperless statements. You can even have up to two accounts.
The Nationwide FlexDirect also pays 5% interest, available on balances up to £2,500 this time, though it’s only for the first 12 months and you have to pay in £1,000 a month. There is also a fee-free overdraft for 12 months.
Then there’s Lloyds Bank's Club Lloyds Current Account which pays 4% AER on balances of £4,000 to £5,000. If you have £2,000 to £3,999.99 you get a rate of 2% AER, while under £2,000 you earn 1% AER. You’ll need to pay in £1,500 a month or else you’ll be whacked with a £5 fee though.
Clydesdale Bank’s Current Account Direct pays 2% on balances up to £3,000, so long as you pay in £1,000.
Cashback and welcome bonuses
A great alternative is the Halifax Reward Current Account, which pays you £5 cashback each month that you pay in £750, pay out two direct debits and don’t go into your overdraft. So even if you empty the account every month, you’ll still end the year £60 better off! What’s more, Halifax is paying out a £100 welcome bonus at the moment too.
Another bank paying a welcome bonus is First Direct on its 1st Account. This account doesn’t seem that exciting on the surface – it doesn’t pay interest, you have to pay in £1,000 a month to get it free and it comes with a £250 fee-free overdraft.
However, First Direct wins every single customer service award going, which is perhaps why it will pay you another £100 if you decide to leave between six months and a year after opening it.
The Co-operative Bank is also paying new account holders a £100 welcome bonus, as well as making a £25 donation to a charity of your choice, across its Standard Current Account, Current Account Plus and smile Current Account. However, given the chaos the bank appears to be in, I’m not sure how compelling a proposition any of those accounts are, even with the healthy fee-free overdrafts they offer.
More on banking:
Co-operative Bank to hike packaged account fees by up to 20%
The best current account incentives and freebies
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Comments
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I tried to open a current account with m&s , but they refused me because I don’t have a uk passport. However I am a uk resident. I have credit cards and current account with 3 different banks , and even mortgage.i have excellent credit according to experian report , and never ever had any issue with other banks. When I complained to their customer service the manager she couldn’t care less and even raised her voice at me. Tried to speak to a different person , she promised to get back to me about my complaint which she never did, I phoned them back after few days , but again they mention that I have to have a uk passport , so they don’t accept foreigners , doesn’t matter if you are resident and a tax payer , they even don’t accept Home office residence permit. I feel discriminated by them . I don't think they can compete with the other banks , with this poor level of customer service.
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You mean HSBC launches this M&S account - for M&S hasn't been a REAL bank for many years. All the banking is done by HSBC, and is fronted & badged as if it were M&S - not entirely sure this being honest with the punters? Nearly all the banks are offering the £100 teaser bonus for switching so you need to look a little further. The headline-grabbing 5% interest promise isn't as that generous when it is only on small balances and consequently of no use to any serious saver unless you spread it around by opening multiple accounts across the sector. If you were to try, alarm bells would ring as credit checks exposed this strategy.
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07 July 2014