Marks and Spencer have launched their first bank account, a current account and although there are some great perks, as you would expect from the retail giants, it comes at a price. The current account will cost you £20 a month to run, costing £240 a year and you must pay in at least £1,000 each month. So is it worth the money and what are the advantages of banking with a high street supermarket such as Marks and Spencer?
At present the first Marks and Spencer bank opens today at the high street branch of Marks and Spencer’s flagship store in Marble Arch London. However, the store plans to open over 20 branches in other stores and have another 50 open by the end of 2013. The real benefit of banking with Marks and Spencer is that the bank will be open when the store is, meaning Sundays and late night shopping. You also get a 24 hour, seven day a week UK call centre and internet access.
As for charges, there will be no charges for bounced cheques, returned payments or going into the red. There are also no charges for using your debit card abroad, that means spending or using the cash machines.
There is also worldwide travel insurance for four people, up to the age of 70 and it can be extended to the age of 80 and grandchildren are also protected, something that most travel insurance policies won’t cover.
Customers of the new account will also have access to a regular savings account that offers a high rate of interest at 4.8% (6% before tax) and there is a £100 overdraft which is interest free, and an automatic £500 overdraft.
You will also get Marks and Spencer vouchers to spend in store including £45 worth of treats vouchers, £40 worth of Marks and Spencer vouchers and loyalty points when you use your debit or credit card. Customers also get money off for the Marks and Spencer cafe and birthday treats.
And as this is Marks and Spencer, your debit card will be designed by none other than Sir Terence Conran, and feature images such as the White Cliffs of Dover, a red London bus and a cup of tea.
What’s the catch?
As stated, you have to pay in £1,000 a month and the account costs £20 a month to run. Marks and Spencer are offering two accounts; one with the travel insurance that costs £20 a month and one without which costs £15 a month.
You do have to pay interest on the overdraft of £500 if you use it and that is 15.9% and if you use your debit card abroad you still get overseas transaction charges which incur a loading fee of 2.75%, equivalent to £5.50 for every £200 you spend.
Whilst the travel insurance may seem like a great deal, if you do not plan on taking your grandchildren with you on holiday then you could shop around and get the same insurance for around £60. So although Marks and Spencer value the perks at around £582 annually, this may not actually be the case.
Also some of the voucher deals may not be that great when scrutinised more closely. Marks and Spencer say you are entitled to vouchers offering 20% off for the first year the account is open. However, these are only valid for one month and on spends of over £250 and not on furniture, food or electrical items.
The savings account which boasts a high rate is only available at this rate for the first month, and there is a limit to what you can pay in.
Colin Kersley, the chief executive of Marks and Spencer Bank, says the benefits from the account, such as Marks and Spencer vouchers and travel insurance, are worth £582 and far outweigh the costs, “There is no such thing as free banking, someone has to pay for it. One of the reasons why banking has gone wrong is that we have got four or five big animals and fewer small ones. What I really like is that you’ve got Marks and Spencer Bank, Tesco and Sainsbury’s are doing things, Metro and Virgin have come on board, so it’s a different type of financial services and it is much more retail-focused. I think that is healthy.”
Whilst we welcome alternative banks from supermarkets and other sources, this one is really for loyal Marks and Spencer shoppers only. It is expensive to run and the perks, when closely examined, are not enough to warrant the extra expense. A shame really as in these times of mistrusting the banks, we could really do with some proper alternatives. For more information visit Marks and Spencer.