So what can you get for a tenner?

First Direct £10 charge sparks packaged account debate.

A monthly fee of £10 can barely buy you a broadband connection, but it could make the world of difference to an estimated 200,000 First Direct customers who are on the brink of being charged £120 a year for their current account.

Analysis* from MoneyExpert.com has revealed that there are six accounts on the market that charge around £10 per month but do not stipulate that their customers must have a minimum income or deposit a monthly sum equal to or above the £1,500 demanded by First Direct.

The independent financial comparison website says that the perks and incentives on offer through these accounts underline the comparatively poor deal offered to those First Direct customers who do not meet the bankís new terms.

Of the six accounts**, the gross AER on a £1,000 balance is 1.88 per cent, although the highest credit interest rate is as high as 3.04 per cent with Smileís Smilemore account. Four out of the six include travel insurance in the deal and three of the six offer mobile phone insurance for free. Other perks on offer include accidental death cover and reduced cost childrenís health cover***, commission free foreign currency and even a variety of discounts at restaurants, theme parks and retail outlets.

All six accounts give customers preferential rates on other products for joining a packaged account scheme. And MoneyExpert.com says that four out six offer breakdown cover in their deals too.

Sean Gardner, MoneyExpert.comís chief executive, said: ìAverage monthly fees for the 33 packaged accounts on the market are only around £11.50 a month ñ not far off the First Direct charge.

ìWhether the First Direct move heralds the beginning of the end for free banking in the UK or whether it merely sparks greater interest in packaged accounts remains to be seen. Itís certainly healthy for consumers if it makes them actively consider alternatives. Too many people settle for awful rates with their providers because of a misplaced sense of loyalty.

"If First Direct’s move is a success then others are likely to follow in one shape or another. This could see the current account market change as providers consider offering standard account holders perks in exchange for a monthly fee ñ much like the packaged account system.

Provider Account Charge per month Travel insurance? Mobile phone insurance? Commission free currency? Other perks? (examples)
Barclays Bank Additions Account £11.50 No Yes Yes Will writing service, ID theft advice helpline
Ulster Bank U First Gold Account £11 Yes No Yes 25% discount on event booking; lifestyle manager service
Northern Bank Northern Choice Plus £10 Yes No Yes Linked savings account
Lloyds TSB Gold Service Current Account £10 Yes Yes Yes AA breakdown cover
Smile Smilemore £10 Yes No Yes Gifting Direct – 25% off selected hand tied bouquets; 20% off the whole Hug Clothing fair trade range

source: www.moneyexpert.com

However MoneyExpert.com is urging customers to carefully weigh up the benefits before they switch to a packaged account as the perks have to add value. Many fee-free accounts can offer better deals if the extra incentives arenít used in the long run.

Compare current accounts

Notes

* Source: Defaqtoís Aequos database

** Accounts: Northern Bank Northern Choice Plus Lloyds TSB Gold Service Current Account Lloyds TSB Gold Service Plus Current Account £1,000+ Barclays Bank Additions Account Smile Smilemore Ulster Bank U First Gold Account

*** Barclays Bank additions account – £7,500 accidental death cover. Children’s health cover from Norwich Union at £4 per month, per child. Product details / summary

Smile Smilemore Account: subscription of £10.00. 12 month £500 fee free overdraft (0% interest on the first £260); 3.04% AER interest on credit balances; commission free foreign currency; worldwide family travel insurance, worth up to £150 a year; Green Flag Roadside Assistance saving you £82 a year; discounts on Travelcare Direct holidays; various ethical extras.

Northern Bank Northern Choice Plus: monthly fee of £30 a quarter. Overdraft facility of up to £15,000 with no setup fee; MasterCard Gold with comprehensive travel insurance benefits; Multifunction card; Optional Visa card; Commission-free foreign currency; eBanking and other self-service options

Lloyds TSB Gold Service: standard monthly fee £10. Upgrade online to receive these benefits for a discounted monthly fee of £7 for three months including: worldwide travel insurance worth up to £161 a year for account holder and partner; mobile phone insurance worth up to £112 a year, which covers for loss, theft, accidental damage and water damage ñ if a joint Gold account cover will be for a maximum of two mobile phones at no extra cost; AA Breakdown Cover worth up to £68 a year; £100 Interest free overdraft; SentinelÆ Card Protection worth £20; up to 25% saving on selected new or used car with CarSelect; minimum discount of 10% off in-store branded electrical goods against Currys, Comet, Powerhouse and John Lewis store prices, including their sale prices, when you spend £50 or more on one item with Lloyds TSB Home Shopping Service; Gold Travel Service including commission-free travel money and travellers cheques.

Barclays Additions account: monthly fee £11.50. Maximum annual benefit £500. Roadside assistance & Homecall; Domestic Emergency Cover; Comprehensive Mobile Phone Insurance; Accidental Death Benefit; Cardholder Protection; Extended Warranty; Children’s Healthcare Cover (available for an additional monthly cost); Telephone & Online Banking; Legal Helpline; Will-writing service; Identity theft advice

Ulster Bank U First Gold account: monthly fee £11. Up to £250 buffer limit; Preferential overdraft rates; Mortgage discounts; Personal loan discount; Exclusive savings account; Commission-free travel money; Inclusive annual world-wide family travel insurance; Guaranteed 10% discount on selected flights and holidays; Discounted hotel booking; 25% discount on event booking; 25% discount with our ufirst dining service; Lifestyle Manager Service; 24-hour access to your account

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