Money Insider: FSA makes sure you receive the right package

Last week the Financial Services Authority (FSA) released its latest policy statement aimed at protecting customers with a packaged, or "added value", current account. Under the new proposals, bank customers with this type of current account will, from 31 March, receive an annual eligibility statement to ensure the product is suitable for their needs.

The new proposals won't make it any easier for consumers to compare the range of packaged accounts on the market, but at least they will know whether they are eligible for the insurance.

I think it's a sensible move from the FSA to insist that the customer receives an annual eligibility statement as a separate mailing, otherwise it could easily be overlooked if bundled in with marketing material.

With some packaged accounts costing £300 per annum, such transparency is vital to ensure consumers aren't getting a raw deal.

These accounts frequently receive negative press due to reports of accounts being sold to customers without their consent or without a full explanation of the benefits.

When the FSA made its latest announcement it provoked the usual outcry from consumer groups tarring all these products as little more than a money-spinner for the banks and a waste of money for account holders.

While I agree that the practice of selling these accounts to customers without checking suitability has to be eradicated, when it comes down to the value of these deals, not all products are the same, far from it.

For example, the NatWest Select Silver account includes European travel insurance (if aged over 70 you pay an extra £50 per annum), mobile phone insurance (one phone per account holder), ID theft insurance, five music track downloads and three DVD rentals per month – for a total monthly cost of £8.

By comparison, you may think the Privilege Premier account from Co-operative bank at £13 per month looks expensive, but before writing it off as a waste of money, take a look at the comprehensive package of benefits.

For a start there is a £300 interest and fee-free overdraft facility which can be worth up to £4.50 per month on its own. There is RAC breakdown cover for UK and Europe, Worldwide (not just European) multi-trip travel insurance, including volcanic ash situations, with cover up to the age of 79. The mobile-phone insurance covers up to four smart phones in the family, plus you have the flexibility of choosing an additional benefit, from Traveller, Gadget or Safeguard options.

It's also worth looking at the costs of some of the cover if you were going to buy it from a standalone provider, for example insuring a single iPhone with Vodafone costs £12.99 per month.

While the NatWest account may be more suitable for some customers just because some accounts look more expensive, the range of benefits can far outweigh cheaper alternatives and the extra £5 per month represents good value for money if you're going to make use of most of the elements on offer.

If you've got a packaged bank account, check your bank's website and remind yourself just what you're paying your fee for each month.

Weigh up how many of the benefits you actually use and if it's clear you're not making full use of the add-ons ask your bank to switch you back to a standard, no-fees account.

Start planning now for next Christmas

It's too late to do anything about this year, but there's nothing wrong with planning ahead, so why not open a separate savings account and start putting some money aside for Christmas 2013.

You'll have a good idea what your total outlay is for presents, food and extra nights out; just divide this amount by 12 and set up a monthly standing order to come out of your bank account the day after you get paid.

Take a look at accounts from Cheshire Building Society paying 5 per cent, West Brom Building Society at 4.1 per cent and Norwich & Peterborough Building Society at 4 per cent.

Most Regular Saver accounts don't allow any withdrawals during the 12-month term of the account and you must also make a payment every month to qualify for the headline interest rate.

These restrictive terms and conditions may seem a little off-putting, but on the plus side, they help you stick to a regular savings plan. As a result, this time next year you won't need to rely on expensive plastic and can enjoy Christmas without fretting about the size of the January credit card bill.