Halifax announces launch of "packaged" current account

Halifax announces the launch of its "packaged" current account, believed to be the best value account of its kind from a major High Street bank.

The "packaged" or "premier" account is market dominated by the Big 4 banks. They have around 7 million accounts generating around £900 million of fee income annually.

The new product will be available in February from all Halifax branches, online and via the telephone. The launch will be supported by a major advertising campaign.

Halifax is very focussed on the current account market. This new product complements Halifax's market leading High Interest Current Account and Moneyback, the only current account in Europe offering cashback on debit card purchases.

Halifax and Bank of Scotland are committed to a strategy of taking business from their major competitors by offering value in markets where there is little or none. Packaged accounts is definitely one of these. The Group regularly takes 20% of the new and switchers market; it has a medium-term benchmark target of 15-20% market share in current accounts.

The Account

The product will offer the best credit interest rate available in the sector. The new account, the Ultimate Reward Current Account, will offer at least 5% Gross on credit balances up to £2,500, a £250 interest free overdraft. The account also offers a range of additional benefits which could be worth over £700 in total to account holders. There is a monthly fee of £10.

The Market

There are currently an estimated 56 million personal current accounts in the UK, with packaged accounts making up 1 in 8 accounts (7 million accounts, Source: Mintel "Premium, Packaged and Aggregate Account Banking- UK" , January 2006). Fee income from these accounts has risen by a third in just over 3 years to £874 million, according to Mintel. This is a significant market in which HBOS does not currently have a stake.

Value of Main Benefits

Customers who take the Ultimate Reward Current Account will automatically benefit from the best credit interest rate on the High Street and the £250 interest free overdraft. They will also automatically receive Family Worldwide Multi-trip Travel Insurance with golf and winter sports cover, AA Roadside Assistance, 1% extra on the interest rate on Halifax Guaranteed Saver and cash back on new mortgages and loans.

The account also offers a number of other benefits, such as discount on Halifax Insurance products, commission free travel money and a series of discounts with a variety of travel and leisure companies. Customers who wish to make use of the discounted offers for leisure and travel will be issued with a book of discount vouchers that can be redeemed with each provider individually.

Paul Marriott-Clarke, head of banking for HBOS, said, "The Big 4 banks have had it too easy in packaged accounts for too long. Our new account changes all of that.

We believe we are offering the best value packaged account. We are determined to win business from the big clearing banks and offer customers a better deal at the same time."