AVOID THESE PACKAGES

 I must admit I was shocked. The sober, sensible, careful, pragmatic people who read Which? magazine disappointed me. Why? Because nearly one in four of them pays a monthly fee for their current account. Perhaps you do too. But my Money Magic rules 1,2,3,4,5 would be ‘stop it’ pausing only to add 5(a) ‘now’.

 They are generally bad value. I suppose I should add ‘nearly always for most people most of the time’. But the safest advice is avoid them.

 Fees range from £5 a month to £25 with the average around £12 or £144 a year. What you get for this is mainly insurance. 

• Holiday cover – better to get the cover you need and pay separately. That way you are sure it will work when you make a claim
• Car breakdown service – you may already have this (it comes free with most new cars) and it can be hard to cancel within the year.
• Mobile phone insurance – your phone can be added to your home contents policy at little cost.
• Identity theft protection – a complete waste of money as the bank normally pays your loss and will deal with the problems, insured or not.

 Other goodies on offer are higher interest on your money – if you want to earn interest on spare money put it in a best buy savings account. And cheaper overdrafts – if you need one it is better to move banks to find a good deal.

 Overall these packaged accounts do not offer good value for money. Of course, if you look carefully at the small print – especially on the holiday cover – and you want all the insurance deals that are included and the total is really less than the cost of buying them separately (and look sceptically at the bank’s own valuation!) and you can cancel any existing policies at once without penalty then they might, just might, in some circumstances, be good for you. At the moment. But keep it under review.

 According to Which? the banks are spending 42% of their advertising budget promoting these accounts. They are not doing that because packaged accounts offer customers a good deal. But because they are very profitable. So save yourself £12 a month – which is £144 a year and that is like a pay cut of £200. No thanks. Not just before Christmas.