A number of high street banks offer "packaged" bank accounts that charge a montly fee, with the FSA claiming that one-in-five UK adults has such an account.
The £20 account offers travel insurance and in-store benefits worth up to £658 a year, according to M&S. These include £40-worth of vouchers, 20pc off a monthly spend of £250 for the first year and free hot drinks. Customers will also be given access to a savings account with a fixed rate of 6pc.
The lower-priced account does not come with insurance and contains a lower amount of potential benefits.
Would you pay to bank with M&S?
Both have an automatic £500 overdraft, with the first £100 interest-free.
Andrew Hagger, of Moneynet, said: “I wasn’t anticipating M&S coming to market with a premium fee paying current account and feel that this may limit the number of people who switch from their current bank, although maybe this is part of the strategy not wanting to launch a mass market product and risk being inundated with a huge influx of new customers that it couldn’t cope with and being unable to offer a good level of service.
“The account will be popular among loyal M&S shoppers with many of the rewards within the package related to in-store spend, but I’m not sure that travel insurance, free debit card transactions abroad and a 6pc regular saver will be sufficient for consumers who are fed up with their current bank to fork out £20 per month to transfer their custom.”
The first M&S Bank branch will open at the retailer's flagship store at Marble Arch in London.
M&S plans to open 50 branches in its stores over the next two years, creating 500 jobs by the end of 2013.
Colin Kersley, the head of M&S Bank, said: “With more than 25 years in personal finance, our loyal customers trust us to deliver the products and services that are right for them. A current account is the natural next step and we have designed this product with our customers in mind - combining the exclusive M&S benefits they love, with a transparent account structure that has no hidden fees.”
M&S will launch the two accounts in October, although customers can “pre-register” for them from today.
The move comes amid an FSA probe into "packaged" accounts, which have sparked concerns from that customers may be paying for services they do not use.