Free banking debate: Would you pay £500 a year for a bank account? Investec, better known as an asset manager, is targeting its £500 Voyager account at fans of private banking. Customers must have an income of £150,000 to receive a suite of benefits - including unlimited airport lounge access, comprehensive worldwide travel insurance, a concierge service and 1.5pc a year on your entire credit balance. By contrast, Santander has made a shift away from this sort of bundled deal. It is booting 300,000 customers out of accounts that cost up to £20 a month for perks such as mobile phone insurance and breakdown cover. Make of that what you will. More importantly, Santander is the first bank to pull customers out of paid-for banking, amid a wider trend of banks retreating from the packaged current account market. In December, Lloyds TSB stopped selling packaged deals and refuses to name a relaunch date. The troubled Co-operative Bank followed suit in March. This direction of travel coincides with investigations undertaken by the City regulator. The Financial Conduct Authority has expressed serious concerns that a significant number of the 10 million packaged accounts sold have been pushed on customers who do not need or cannot claim on the insurance policies. If banks continue to curtail their sales drives attention will almost certainly turn to free accounts. "Free" banking is in some ways a misnomer if no interest is paid to customers, as banks use our deposits to make money from other activities. However, profit is tightly constrained by running costs such as staff salaries, IT systems, and branches. Staff at major High Street banks tell me they are under huge pressure to cross-sell other, more profitable products to current account customers. This is what keeps bank profits in the billions of pounds and shareholders satisfied. Bank executives had hoped customers would gravitate towards packaged accounts naturally over time, lured in by glossy benefits and hard selling. One industry source told me a typical £12 a month package of benefits can cost as little as £3 to deliver - a juicy extra margin on the profits made from free accounts. But with the prospect looking increasingly unlikley, expect renewed calls for a system where everyone pays a small fee for day-to-day banking. This wouldn't be in the region of Investec's £500, but perhaps nearer £60 a year. If regulators or policymakers get involved in this debate, they must ask themselves if this will genuinely help prevent future mis-selling or simply swell banks' coffers further. If a small charge does become the norm, the biggest losers will be those happily using a simple "free" current account to conduct their affairs - and too wise to fall for the duff insurance sales pitch.