A savings account is a type of account that offers profits in the form of interest for people who have made a deposit. Savings Accounts are generally offered by banks or other financial institutions.
A Savings Account is considered to be one of the safest as well as a reliable investment opportunities for people.
In most banks, the country’s government stands as a guarantee for the money that has been deposited in the accounts. In some other cases, the money in the accounts is insured by a top-tier regulator.
However, the interest generated from depositing money into savings accounts is very low when compared to the profits that can be earned from other types of investment opportunities.
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La información contenida en este artículo es meramente orientativa. No constituye asesoramiento financiero, jurídico o fiscal, ni una recomendación o solicitud de inversión. Algunos hechos pueden haber cambiado desde el momento de su redacción.
M&S Bank
‘M&S Bank’, which is a trading name of ‘Mark & Spencer Bank’ or ‘Mark & Spencer Financial Services plc’, is a retail bank in the United Kingdom.
It was founded in the year 1985 as ‘St Michael Financial Services plc’, which later became into Mark & Spencer group.
It was sold to ‘HSBC Bank’ in 2004 and has been operating under the name M&S Bank since then. It was sold under the terms that HSBC would be able to share profits from M&S Bank until 2019 (at least).
It is estimated that the M&S company was sold to HSBC for an amount of £580 million.
The major financial services offered at M&S Bank are services related to Banking (Traditional Banking and Internet Banking), Credit, as well as Insurance. It has recently launched services related to Mortgages as well.
Things to consider while banking with M&S Bank
Pros:
- M&S Bank offers banking services online. This makes it easy for people to open or manage an account online, which is an easy, simple and hassle-free process.
- There are more than 30 branches of M&S Bank located all over the UK making it easy to approach physically.
- Some of the savings accounts offered by M&S Bank are known to provide optimum interest rates when compared to other banks.
Cons:
- Even though the interest rates provided are very good, the competitive interest rate is only applicable for a period of 12 months. Adding to that, the best interest rates are only provided when a person transfers their current account into M&S Bank.
- The mobile application is only good for checking balance or transactions. Money cannot be managed with the help of the mobile app.
- People having a current account should acquire an M&S Pass. Without this authentication gadget, a person cannot be able to log in.
Current Accounts, Credit Cards and Insurance
Current Accounts
There are two types of Current Accounts offered by M&S Bank, they are ‘M&S Current Account’ and ‘M&S Premium Current Account’. Let us have a detailed look at both of them.
‘M&S Current Account’ – This is the general current account at M&S Bank. There is no monthly fee applicable to this type of account.
Customers having an M&S Current Account are provided with access to the M&S Loyalty Scheme.
Customers can also be able to access the Monthly Saver savings account if they switch their existing current account to M&S Bank with the help of the Current Account Switch Service while having two active debit cards.
An arranged overdraft facility is available for the individuals, where the overdraft is allowed up to an agreed-upon limit. Interest is applicable to the arranged overdraft facility.
In order to cope with the Covid-19 pandemic situation, M&S won’t charge interest up to £500 on arranged overdraft borrowing until August 29, 2020. If the amount exceeds £500, they will charge interest of 19.9%.
The general rates for overdraft borrowing are 39.9% for an amount that exceeds £250. If the amount is below £250, they won’t charge interest. This rate will be applicable for the customer from 30 August 2020.
Customers can be able to open an account without having to approach the bank directly. They can send all the required documents and other information electronically (in some cases).
Customers can be able to access their account with the help of internet banking or the M&S Banking App. A contact-less Visa Debit Card is also provided, with which customers can be able to transact in more than 38 million locations over 200 countries.
‘M&S Premium Current Account’ – The monthly fee for the M&S Premium Current Account is £10 per month. Customers get access to the Monthly Saver savings accounts with the help of this account.
The arranged overdraft facility is available, which is the same as of the M&S Current Account. The account opening, accessibility and Contact-less Visa Debit Card are also the same as for the M&S Current Account.
Customers are provided with exclusive rewards as well as gift vouchers, which makes it unique when compared to the general current account.
Customers get £40 worth of vouchers for clothing, £45 worth of vouchers for treats and delights, £132 worth of hot drinks vouchers (48 vouchers per year) and a birthday gift.
However, M&S Bank is not processing new applications for the M&S Premium Current Account (temporarily), due to the COVID – 19 Pandemic.
Credit Cards
M&S Bank offers a credit card with three types of offers, they are ‘Shopping Plus Offer’, ‘Reward Plus Offer’ and ‘Transfer Plus Offer’.
‘M&S Credit Card Shopping Plus Offer’ – Customers can apply for this credit card under 7 minutes. As the name itself suggests, the credit card with this offer is useful for shopping purposes.
Customers can be able to make purchases for 20 months with a 0% interest rate. Every time a customer spends money on shopping, they are rewarded with M&S points.
Balance Transfers can be made for 20 months with a 0% interest rate. However, there is a fee applicable to the balance transfers, which is 2.9% and it should be at least £5.
The representative rate is 19.9% APR (variable) and the purchase rate is 19.9% p.a. (variable). The assumed credit limit is £1,200.
‘M&S Credit Card Reward Plus Offer’ – Customers can apply for this credit card under 7 minutes. This offer mainly concentrates on rewards.
There is no interest applicable to shopping for a period of 6 months. 2,000 M&S reward points (worth £20) are rewarded if a customer makes use of the card within 90 days after receiving it. Reward points are doubled for the first 12 months.
Balance Transfers can be made for 20 months with a 0% interest rate. However, there is a fee applicable to the balance transfers, which is 2.9% and it should be at least £5.
The representative rate is 19.9% APR (variable) and the purchase rate is 19.9% p.a. (variable). The assumed credit limit is £1,200.
‘M&S Credit Card Transfer Plus Offer’ – Customers can apply for this credit card under 7 minutes. This offer mainly concentrates on Transfers. There is no interest applicable in shopping for a period of 6 months and points are rewarded on each purchase.
Balance Transfers can be made for 28 months with a 0% interest rate. However, there is a fee applicable to the balance transfers, which is 2.85% and it should be at least £5.
The representative rate is 19.9% APR (variable) and the purchase rate is 19.9% p.a. (variable). The assumed credit limit is £1,200.
Insurance
M&S Bank offers different types of insurance, they are ‘Car Insurance’, ‘Home Insurance’, ‘Pet Insurance’, ‘Travel Insurance’ and ‘Life Insurance’.
M&S Bank Savings Accounts
There are four types of savings accounts provided by M&S Bank, they are ‘Everyday Savings Account’, ‘Fixed Rate Savings Account’, ‘M&S Cash ISA’, and ‘Monthly Saver’.
‘M&S Everyday Savings Account’
This a simple everyday savings account offered by M&S Bank. An ‘M&S Everyday Savings Account’ can be opened with an initial deposit of just £1.
The interest rate is 0.01% AER/gross (variable). The interest is calculated based on the average daily balance and is paid out monthly.
Withdrawals can be made up to £10,000 without any penalty. Withdrawals can even be made online or by a phone call.
Accounts can be easily managed online with the help of internet banking.
Customers are able to add money into their savings account by cheque or bank transfer. Regular deposits can also be made by making use of standing orders. The maximum limit for deposit is £1 million.
‘M&S Fixed Rate Savings Account’
With the help of an ‘M&S Fixed Rate Savings Account’, customers can be able to earn a fixed rate interest for a period of 1,2, or 3 years.
The interest rates are as follows:
- A 1-year fixed rate of interest – 0.45% AER/gross
- A 2-year fixed rate of interest – 0.55% AER/gross
- A 3-year fixed rate of interest – 0.70% AER/gross
Customers are able to save an amount ranging from £500 to £1 million with the help of an M&S Fixed Rate Savings Account.
This account can be opened online, by post or with a phone call. The process for opening an M&S Fixed Rate Savings Account is simple and would take somewhere around a few minutes.
Fixed Rate Savings Account at M&S Bank can be opened online if the deposit amount is less than £40,000.
Early closure is available for the accounts having a deposit under £50,000. However, withdrawal charges are applicable for the early closure of this account.
The withdrawal charges for early closure of M&S Fixed Rate Savings account are as follows:
- Early withdrawal for 1-year fixed-rate – £50
- Early withdrawal for 2-year fixed-rate – £75
- Early withdrawal for 3-year fixed-rate – £100
However, people having an amount more than or equal to £50,000 wouldn’t be eligible for early withdrawal until the term of the deposit is complete.
‘M&S Cash ISA’
The tax benefits offered to a customer with the help of an ‘M&S Cash ISA’ depend on the circumstances and tax rules that may be subjected to a change in the future.
The M&S Cash ISA can only make the customer free from the UK Income Tax and the Capital Gains tax.
With the help of an M&S Cash ISA, people are able to split their existing ISAs or subscribe for new ISAs between fixed and variable interest rates.
The fixed interest rate offered by M&S Cash ISA ranges between 0.55% and 0.80% AER/tax-free and is available for periods of 1,2, or 3-year terms. The variable interest rate, on the other hand, is 0.10% AER/tax-free.
The overall subscription limit for an M&S Cash ISA is £20,000 for the 2020 – 2021 tax year. Customers are able to subscribe to a combination of permitted ISAs in the same year, by following the subscription limits and eligibility requirements for each type of ISA.
However, they cannot exceed the overall maximum limit for ISA allowance, which is £20,000, for the tax year 2020 – 2021.
Customers who choose a variable interest rate can be able to top up their existing limit or withdraw funds from it, without having a penalty.
However, if a person reaches his/her full ISA allowance for that current year, the amount withdrawn cannot be replaced during the same year.
On the other hand, customers who opt for fixed-rate interest, are subjected to an early withdrawal fee for making a withdrawal before the term period ends (whether it is 1,2, or 3 years).
The interest and early withdrawal charges for the fixed-rate interest are given below in the form of a table.
| Interest (AER/tax-free) | Early withdrawal charges | |
| 1-year fixed-rate | 0.55% | £50 |
| 2-year fixed-rate | 0.65% | £75 |
| 3-year fixed-rate | 0.80% | £100 |
Customers are also able to divide their savings between variable and fixed-rate options. In order to state an example for that, a customer is able to deposit £5,000 in the variable rate option and £15,000 into the fixed-rate option.
Even if the amount is divided between the two options, the amount upon the maximum limit for tax-free allowance in a certain tax year, cannot be able to replace the amount that has been withdrawn in the same tax year.
‘M&S Monthly Saver’
‘M&S Monthly Saver’ savings account is the best type of savings account offered by M&S Bank. It is exclusively accessible by the customers who already have a current account or apply for it.
Customers should have switched to M&S Bank with the Current Account Switch Service and should possess two active Direct Debits.
People are able to save between £25 to £250 in a month for 12 months with the help of this account. The interest payments are made with the help of a standing order into the customer’s current account.
If a customer saves an amount which is less than £250, they are able to carry over any unused allowance to the following months.
The interest rate provided to the customers having a Monthly Saver Account is 2.75% AER/gross, which is actually impressive and high compared to the interest rates provided by many other banks.
According to a general estimation, this 2.75% interest rate is known to provide approximately £44.69 in one year, if a customer is able to save an amount of £250 every month.
If a current account is closed, the interest rate is changed back to the variable interest rate.
AER refers to the Annual Equivalent Rate, which is the general interest if the interest was paid and compounded on a yearly basis. Gross refers to the interest rate if the interest rate is paid annually without compounding.
All the interest rates are accurate and provided by M&S Bank on their website as of the date 5th May 2020.
How to choose an account
People can pick the right type of account suitable for their needs depending on various factors such as Interest Rates, fees, Ability to Withdraw, Rewards, etc.
There are many attractive features of having a savings account at M&S Bank. Some of them are:
- Customers can be able to access and manage their accounts online. This is one of the exquisite features that allows customers to manage all their banking activities online without having the need to approach a bank physically.
- Physical presence by having more than 30 branches in the United Kingdom makes it convenient for the people who are interested in a physical bank and people who don’t trust online banks.
- Login is secure and customers are able to set their login security. A finger-print option or a facial recognition feature can be used by a customer to login and access his/her account.
- Contact-less Visa Debit Card that can be used in 38 million locations across 200 countries in the world. If the card is lost, customers can lock their cards until they get a new one.
- M&S Bank does not charge any sort of fees on the refusal of withdrawal due to insufficient funds (such as bounces of Direct Debit).
- Ability to withdraw funds among all the savings accounts (except if the deposit is more than £50,000).
- Customers having a Monthly Saver account are able to save money with a high interest rate of 2.75%. This is very high when compared to most other banks.
There are certain drawbacks for the savings accounts at M&S Bank as well. They are:
- The Monthly Saver account which is the best type of savings is only accessible by the existing or new current account holders. It would have been great if people could directly open this account without having this necessity.
- With the Monthly Saver account, people are only able to save up to an amount of £250. This is a little bit inconvenient for the people who would like to save more.
- Early withdrawal charges are somewhat higher. However, the ability to withdraw early is an advantage.
- Poor customer support.
- Lack of effective functionality of the mobile app as well as internet banking (based on customer reviews on many websites).
Safety
M&S Bank is authorized by the ‘Prudential Regulation Authority’. It is regulated by the ‘FCA (Financial Conduct Authority)’ as well as the ‘PRA (Prudential Regulation Authority)’.
M&S Bank is protected by the Financial Services Compensation Scheme (FSCS). This means if anything ever happens, the funds of a customer would be covered up to an amount of £85,000. FSCS also covers the financial services provided by M&S Bank such as Investments, Pensions, Financial Advice, Insurance, etc.
Customer Support
Customer support is not as effective as it should be for a major bank like M&S Bank. Most of the reviews on other websites show that customers face a lot of inconvenience due to the lack of good customer support.
The general account-related information can be obtained by contacting the support team through Internet Banking or Live Chat. Live Chat is available for the customers all over the week from 8 AM to 8 PM (BST).
Due to the increase in chat volumes, a customer would only be invited to a chat when a customer service representative agent is available.
For complaints and queries, people can contact the customer service team via a phone call.
Bottom Line
M&S Bank is a reputable bank known for a lot of features offered to the customers. It is highly suggested that customers should choose a savings account that is appropriate for them and meets with all their requirements. However, in order to get the best benefits from a savings account, a current account at M&S Bank is also required.
People should also remember that most of the existing customers at M&S Bank are facing a lot of problems related to the online platform, mobile app and the customer support.
People should carefully select a savings account by keeping these aspects in mind.
Most of the customers are provided with an answer that the outbreak of COVID – 19 Pandemic is the reason for the lack of efficient customer support.
Let us hope that the customers will be able to get the required help once we get over this situation.
Further Reading: Friends Provident International Reserve Bond Review examines secure savings options, similar to M&S Savings Accounts Review.
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Adam es un autor reconocido internacionalmente en temas financieros, con más de 830 millones de respuestas en Quora, un libro muy vendido en Amazon y colaborador de Forbes.
