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Bank account costs

More and more current accounts are becoming what is commonly known as ‘bundled’, meaning they have added extras that run alongside the account such as mobile phone insurance and breakdown cover. The catch, however, is that you will be required to pay a monthly fee for the account, which could be anywhere between £5 and £30 from the mainstream banks.

When shopping for a current account it is vital that you weigh up all of your needs. First of all, do you really need the added extras? Some are particularly useful, and good value too. If you go travelling a lot and need to take out insurance for example, some accounts will add travel insurance benefit that will cover all of your travelling. Mobile phone insurance is also a good one to have. Many phone insurers will charge between £7 and £12 per month to insure your device, but some current accounts will do this, travel insurance, card protection and breakdown cover, all for under £10 per month.

However, even if you have a free account, you are still subject to being charged. You will be able to run some bank accounts free of charge, provided you avoid asking for duplicate statements or cancelling a cheque. The danger zone for charges is undoubtedly the overdraft.

Some banks let you overdraw by a small amount, for example £50, without charging you. But normally, if you overdraw without prior agreement you could be heavily charged - and with a fee on top too! The bank can refuse to pay your 'bouncing' cheques or Direct Debits too.

Paying the fees associated with an agreed overdraft is infinitely wiser and much, much cheaper than going overdrawn without consent.

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