Existing packaged account customers will see prices go up from July.
The Co-operative Bank is hiking the cost of its packaged accounts by up to 20%.
From 1st July 2014 Privilege Account holders will see their monthly fee rise from £9.50 to £11. This means the account will cost £132 annually instead of £114, an extra £18 a year.
Privilege Premier Account and smilemore customers will pay £15.50 a month instead of £13. This means the accounts will cost £186 annually rather than £156, an extra £30 a year.
These accounts – removed from sale to new customers since last year- include benefits like worldwide family travel insurance, mobile phone cover for up to four phones, RAC UK and European breakdown cover (only Privilege Premier and smilemore customers), access to the Co-op’s legal services and interest-free overdrafts of up to £300.
Each also comes with the choice of one of three lifestyle benefits, including a credit report monitoring service, four airport lounge passes and gadget cover.
A Co-op spokesman said the hikes were necessary because of the increased cost of providing these features to customers, but pointed out there would be no change in the benefits offered.
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Troubled Co-op
The Co-operative Bank has been in crisis since the failed takeover of 632 Lloyds branches back in April 2013, which revealed a £1.5 billion black hole in its finances.
It resulted in the bank being downgraded by Moody’s and losing 70% of its banking arm to private investors.
Unsurprisingly customers turned away, but earlier this year the Co-op tried to restore trust and win people back with a £125 incentive offer for new customers taking out its current accounts.
[SPOTLIGHT]But now packaged account customers are being made to pay more and with a new independent report once again highlighting the bank’s failings, another customer exodus might be on the cards.
The best alternatives
If you’re not happy with the Co-op Bank’s price rises or its general performance over the last year, it might be time to jump ship.
There are plenty of other packaged accounts you could switch to that could offer you better value for the monthly fee.
The Nationwide FlexPlus account, for example, offers worldwide family travel insurance, worldwide family mobile phone cover, UK & European breakdown cover, extended warranty cover and pays an ongoing 3% of credit interest on balances up to £2,500. All this is available for £10 a month.
The NatWest/RBS Select Silver Account also comes with a range of benefits for £10 a month. You get European travel insurance and mobile phone cover for up to two phones, as well as perks like LOVEFiLM DVD rental and HMV digital downloads.
For £16 a month you can get an even better deal with the NatWest/RBS Select Platinum Account, which comes with a £100 interest-free overdraft, worldwide travel insurance, mobile phone cover for up to two phones and UK car breakdown cover as well as tastecard membership and two National Trust family passes a year.
Barclays allows you to build your own packaged account with add-ons like the Tech Pack (£7.50 a month for mobile phone and gadget cover) and the Travel Pack (£8.50 a month for European family insurance and breakdown cover). Combining add-ons can also get you a discount.
And Halifax is offering the Ultimate Reward Current Account, which costs £15 a month or £10 as long as you pay in £750 or more each month. For the fee you get worldwide multi-trip family travel insurance, AA breakdown cover including home start, mobile phone insurance, and home emergency cover. New customers switching to the account will also get a £100 cash bonus.
Alternatively there are plenty of good free current accounts about that are offering decent levels of in-credit interest.
Nationwide’s FlexDirect for example offers 5% interest on balances up to £2,500 as well as an interest free overdraft for 12 months.
The TSB Classic Plus Current Account also pays 5% interest but on balances up to £2,000, though the rate won’t drop away after a year.
For larger balances there’s the Santander 123 Current Account, which pays 3% credit interest on balances between £3,000 and £20,000 as well as up to 3% cashback on certain household direct debits.
Compare current accounts with lovemoney.com
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