Is it worth paying hundreds of pounds a year for a current account? Millions of people seem to think so, since roughly one in five UK adults has a so-called packaged account. These accounts come with bolt-on benefits, such as travel and mobile phone insurance, in return for a monthly fee.
The problem is that the perks aren't always worth the fee, while many customers don't make full use of what's on offer. But the accounts are a good source of revenue for banks, which is why they're keen to sell you one.
Changes are afoot and the Financial Services Authority is cracking down on banks flogging these accounts. New rules come into force in March this year.
But if you plan to make use of an account with added extras, there are many to choose from and much separates the wheat from the chaff – not just the price.
Best for innovation
Two of the most interesting paid-for current accounts on the market are also among the cheapest.
Santander 123 - Good for those with big bills and money to save, and at £2 a month you're likely to make your money back.
It's an innovative cashback account, rewarding you in pounds and pence for everyday spending. As long as you pay in £500 a month and have a minimum of two direct debits set up, you get 1% cashback on water bills, council tax and Santander mortgage payments (up to £1,000 per month). You also get 2% cashback on gas and electricity and 3% cashback on communications, including mobile phone bills, landline, broadband and TV packages.
You can even gain interest for balances in credit – 1% AER from £1,000, 2% from £2,000 and 3% for balances between £3,000 and £20,000 – currently beating many top mainstream savings accounts.
Santander has often scored poorly in customer satisfaction and customer service polls. There has been some improvement of late but if you prioritise this above sweeteners then perhaps look elsewhere.
NatWest / RBS Select Silver - Currently £8 a month, but the fee rises to £10 per month from 17th February, it's the best out there for music and film lovers.
It comes with a LOVEFiLM subscription worth £5.99 a month and five free downloads from hmvdigital each month.
In addition to this, you get the more traditional packaged account bolt-ons including annual multi-trip European travel insurance for you and any joint account holders, mobile phone insurance and preferential rates on travel money.
Interest and fee-free overdraft
The Co-operative Bank's Privilege and Privilege Premier - Priced £9.50 and £13 per month respectively, the former offers a £200 fee and interest-free overdraft, while the latter gives £300.
The accounts come with worldwide family travel insurance, mobile phone insurance and access to exclusive mortgage deals. The Privilege Premier offers motor breakdown cover on top.
However, there's little point paying for a current account just for the overdraft, since fee-free accounts may offer something cheaper anyway. But if you make full use of the other benefits these accounts could prove useful.
Best for travellers
NatWest / RBS Select Platinum - It's a steep cost at £16 a month but it's one for families to consider, especially those who like holidays and days out. The account comes with two family passes for National Trust days out and a Tastecard membership offering two-for-one and 50% discounts at thousands of restaurants across the UK.
Among the more usual perks are worldwide family travel insurance, mobile phone insurance, UK car breakdown cover and preferential rates on travel money.
Barclays Travel Plus Pack - Barclays offers a standard bank account with added optional extras available through its 'Feature Store.' Travel Plus Pack costs £13.50 a month, which includes worldwide family travel insurance, comprehensive RAC breakdown cover including travel in Europe and the main advantage: airport lounge access for you and your family – up to six free visits a year. If you're not fussed about the latter, it's probably not worth paying for the account since you can get cheaper standalone deals for the insurance and breakdown cover.
The not-so-hot accounts
Last month Lloyds TSB announced it was temporarily suspending the sale of packaged accounts in branch and over the phone but they're still available online.
The range on offer from Lloyds TSB includes the Silver account at £9.95 per month with couple's European travel insurance, AA breakdown cover, mobile phone insurance and a £50 interest and fee-free overdraft.
These elements become more comprehensive if you opt for a more expensive account. The Gold account is priced at £12.95 per month, the Platinum at £17 per month and the Premier, which includes worldwide family insurance, a £500 overdraft and a better motor breakdown policy, at £25 per month.
The Halifax Ultimate Reward Current Account fee is £10 per month if you pay in £1,000 per month; £15 if you don't. A new promotion from Halifax also offers a £100 switching incentive. The account comes with an interest and fee-free overdraft up £300.
However, in a bizarre twist, from the 1st May if you actually use this perk and dip into the overdraft, you lose the right to the lower monthly fee. The only way to dodge this is if you use the overdraft but clear it by the end of the same day.
The account also comes with worldwide multi-trip family travel insurance, AA breakdown cover, mobile phone insurance and home emergency cover for burst pipes or broken windows.
HSBC's Advance Account is priced at £12.95 a month and the two main benefits are worldwide family travel insurance and breakdown cover. Both of these benefits could be cheaper when bought independently, making the full £155 annual cost of the account look like a lot of money for not much in return.
M&S jumped on this lucrative bandwagon last summer, launching two accounts that reward the most committed of M&S shoppers.
For £15 a month you get store vouchers worth £40, M&S loyalty points and even hot drink vouchers for use in one of the store's cafes, presumably for when you're already in the shop, spending more money there. You also receive a birthday gift worth £10 and a treat or vouchers four times a year.
Two of the account's benefits that don't involve shopping at M&S include a £500 overdraft with the first £100 interest-free and access to an exclusive high-rate monthly savings account at 6%.
For £20 a month you get worldwide multi-trip family travel insurance thrown in on top – but that account adds up to an expensive £240 a year.
However, it has just added a £100 M&S gift voucher if you open the account before the end of February.
Travel insurance is competitively priced and often you can buy cheaper online instead of paying for a packaged account. For example, a quote for annual multi-trip worldwide travel insurance with winter sports cover for a family of four - including two adults and two children under the age of 16 - threw up several options for less than £50.
Mobile phone insurance is another sticking point, because for some people it's completely useless. For example, many home insurance policies cover mobiles even when they're taken out of the home.
And don't forget the fee-free accounts with added freebies. The Halifax Reward account pays you £5 a month and First Direct's 1st Account comes with a £125 switching incentive and £250 interest-free overdraft. For more on this read about the five bank accounts that give you something for nothing.
Most complained about financial products
The best and worst packaged current accounts
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.
Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.
To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.
In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.