What is it?

ANZ has introduced a transaction account with bonus interest rates on savings, insurance services and a number of non-banking benefits, such as restaurant discounts, all covered by an $18 monthly fee.

The new product, ANZ Extras, is part of a trend towards more innovation in the transaction and savings account market.

St George Bank has won accolades for a transaction account, Sense, launched last year. It links transaction and savings functions and provides customers with detailed monthly reporting aimed at helping manage their budgets and increasing their regular savings.

Sense shows the customer's spending in different budget categories and compares current spending with that of the previous month and year. It has tools for setting and tracking savings targets.

The head of debit at MasterCard, Robert Walls, says a lot of development is aimed at steering customers away from taking cash out at an ATM and more towards electronic payments.

For the institution, this has the benefit of retaining the cash for longer and increasing profitability.

How it works

ANZ Extras is based on a transaction account operated with a Visa debit. Customers are given a fee-free overdraft of up to $500.

If customers open a linked online savings account, they get 0.2 of a per cent on top of the base rate. They can also have a fee-free credit card - ANZ First (18.99 per cent on purchases and no rewards program).

The $18 fee covers premiums on mobile phone insurance, domestic travel cover and a small amount of accidental death cover. Non-financial benefits include 20 per cent discounts on meals in designated restaurants, discount shopping and early access to event tickets.

There is also 24-hour roadside assistance and two free call outs a year for home emergencies (see anz.com/extraspackage).

Pros

 Flat-fee transaction accounts, which ANZ pioneered, have proved popular with customers, who like the peace of mind of knowing what they will pay for their transaction service. The idea of paying a higher fee for a package of additional services makes good sense as long as they are useful.

The $18 monthly account fee covers the $30 annual credit card fee and a $5 a month fee for the overdraft facility, ANZ Assured. The ability to overdraw by small amounts from time to time is useful. The extra 0.2 of a per cent interest on the online savings account, currently 4.5 per cent, adds $2 a month to interest earnings on a $10,000 deposit.

Cons

The choice of only one credit card is a limitation. ANZ First is a standard product with no rewards program and a mid-range interest rate of 18.99 per cent. It won't appeal to people who want to earn points; nor will it attract people who want a low-rate card.

The cover in the insurance package needs to be looked at closely. The bank says it is offering a "small amount" of accidental death cover. Is it worth having? Do you already have travel cover through an existing credit card? How does mobile phone insurance work?

Some of the items in the package may be available through products you already use. Travel insurance is a common extra with credit cards. If you have a package home loan, you probably already have a fee-free credit card and discounted insurance.