The current account with the full package

Fancy all the perks that come with a packaged current account, but don't fancy the monthly fee? Here's how you can enjoy it all without paying a penny.

Here at lovemoney.com, I think it’s fair to say that we’ve never been big fans of packaged current accounts. After all, in many cases, they charge you a monthly fee in return for so-called ‘perks’ which are often not truly worth it.

But what would happen if you could apply for a packaged current account, still benefit from the perks, but not have to pay the monthly fee?

Well, that’s exactly what you’ll get if you apply for the Co-operative Privilege Premier Current Account or the Co-operative Privilege Current Account by 20 November, as the usual monthly fee for these accounts will be waived for 12 months.

So let’s take a look at both of these accounts in more detail.

The benefits

Here’s what’s included in the Co-operative Privilege Current Account – normally £9.50 a month:

• Worldwide family travel insurance, including personal belongings, scuba diving, golf and winter sports
• Mobile phone insurance
• A £200 interest-free and fee-free overdraft
• Credit card rate of 11.9%, with a promotional balance transfer rate of 2.9% for 12 months with no balance transfer fee.
• Exclusive lifetime tracker mortgage
• 20% discount on entry to over 200 leisure attractions across UK.
• Privilege Savings account which is guaranteed to track 0.3% below the base rate for the life of your current account
• Free legal advice
• 20% off your home insurance.

And here’s what’s included in the Co-operative Privilege Premier Current Account – normally £13 a month:

• UK and European motor breakdown assistance
• Worldwide family travel insurance, including personal belongings, scuba diving, golf and winter sports
• Mobile phone insurance
• A £300 interest-free and fee-free overdraft
• Credit card rate of 11.9%, with a promotional balance transfer rate of 2.9% for 12 months with no balance transfer fee.
• Exclusive lifetime tracker mortgage
• 20% discount on entry to over 200 leisure attractions across UK.
• Privilege Savings account which is guaranteed to track 0.1% below the base rate for the life of your current account
• Free legal advice
• 20% off your home insurance.

So, as you can see, the Co-operative Privilege Premier Current Account has the same benefits as the Privilege account, but it also throws in motor breakdown assistance, a marginally better savings rate, and a slightly larger interest-free overdraft.

So just how good are these benefits?

A good deal?

On paper, these benefits look pretty decent. After all, UK and European motor breakdown assistance (which usually costs around £40-50 a year) is pretty handy to have (although remember this is not included with the Privilege account, only the Privilege Premier account), particularly with winter on its way. No one wants to be stuck on the hard shoulder on the motorway on a freezing cold day, going nowhere.

If you’re a regular traveller, worldwide travel insurance is also likely to be a big help, particularly since it covers you and your family and includes winter sports cover. The cover is also available until you’re aged 80.

And if you do have a family, having 20% off a wide range of UK attractions, such as Kew Gardens, Leeds Castle, London Zoo and Wickstead Park, is bound to score you a few Brownie points.

What’s more, mobile phone insurance often works out to be pretty pricey – anywhere from around £60-100 a year, depending on the level of insurance. So anyone concerned about losing their mobile phone might jump at the chance to have insurance included with their current account!

And given we could all do with saving a little money, 20% off home insurance is a pretty great bonus too.

But it’s not just these so-called perks that make these current accounts attractive. If you’re prone to slipping into the red, an interest-free overdraft is also likely to prove useful. (Just make sure you don’t go over the limit, otherwise you’ll have to pay 15.9% EAR.) And you’ll also get a special deal on your savings account and mortgage. 

The nitty gritty

So far, this is all looking pretty tempting – particularly considering there’s no monthly fee for a year – meaning you get all of this absolutely free!

That said, you do need to bear in mind that to qualify, you need to pay at least £800 a month into whichever account you’ve applied for. You will also need to transfer over all of your direct debits and standing orders by 31 December 2010.

If you are considering taking out either of these current accounts, you should also make sure you read the terms and conditions carefully, specifically when it comes to insurance policies. It’s really important to check you’ll be covered for what you need and that you won't be affected by any exclusions.

For example, although the travel insurance policy includes winter sports cover, you won’t be covered if you take part in ice hockey, tobogganing, and ski jumping – so if you’re planning to take part in any of these sports, you’ll need extra cover. You can find out exactly what’s excluded here.

Again, for the mobile phone insurance, there are plenty of exclusions. For example, if you leave your phone in a public place or place to which other people have access, you won’t be able to make a claim (and let’s face it, this is when most of us are likely to lose our phone).

You also won’t be able to claim if you’ve left your phone in an unattended car, and you can’t claim for cosmetic damage - in other words, damage which does not impair the normal functions of your phone.

What’s more, there’s an excess of £25, so you may want to consider whether this is worth paying before making a claim. Personally, I think mobile phone insurance is a rip-off, but then again, in this instance, you’re not actually paying for it.

Is it worth it?

Generally-speaking, I’m not a fan of packaged accounts purely because they can be riddled with catches. That said, if you know you’ll get full use of all the perks and you’re aware of the terms and conditions, they are suitable for some people.  

And of course, bearing in mind that both the Co-operative Privilege Premier Current Account and the Co-operative Privilege Current Account are fee-free for a year, I think these accounts are definitely worth considering.

What’s more, if you have ever considered taking out a packaged current account in the past, but wondered if the monthly fee was worth it, you’ll now be given the opportunity to test out how useful these benefits are before deciding whether or not to start paying the monthly fee once the first year is up.

However, before you come to your decision about whether these benefits are worth paying for, it’s a good idea to shop around fully to ensure you really are getting your money’s worth. For example, while a 20% discount on your home insurance might sound tempting, you will have to apply through the Co-op which will limit your options. You may find that by doing a little research of your own, you actually find a cheaper deal elsewhere.

Similarly, if you only ever go on holiday once a year to Europe and you’re single, it may not be worth paying to have worldwide family travel insurance with your current account as there may be a far better deal out there for you.

And finally, while these current accounts give you a special rate on your savings account and mortgage, you also need to consider whether you might get an even better savings account or mortgage elsewhere. After all, the savings accounts you'll be offered with the Co-op only offer interest rates of 0.75% with the Privilege account or 1% with the Privilege Premier account, both of which are utterly rubbish in my view and not worth taking out.

There are several other free current accounts that offer far better deals on other financial products, providing you’re a customer. For example, if you have a Halifax current account, you will get a 0.20% bonus rate on the Halifax Web Saver Extra Account, taking the rate to a competitive 2.80%. And you’ll also qualify for a credit card that offers 12 months interest-free on all purchases, or the Rewards Clarity Card which offers cashback as well as no usage fees for using the card abroad. Find out more in Three banks that reward you.

Once you’ve taken this all into consideration, you’ll be able to assess whether paying for the Co-operative Privilege Premier Current Account or the Co-operative Privilege Current Account is right for you. But of course, in the meantime, who can resist a freebie?

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