M&S Bank launched a premium current account in September 2012, charging £15 a month, or £20 with insurance.

Although, the retailer claims that this has been popular with its regular shoppers, it now wants to take advantage of the UK's new account switching service and push for a bigger slice of the market.

M&S Current Account customers will get an automatic £500 overdraft, the first £100 of which is interest-free, with the remainder to be charged at 15.9% EAR.

The new account will have no overdraft fees and customers will receive free text alerts as they approach their limit. In addition, M&S Bank does not charge a transaction fee for overseas ATM cash withdrawals made with its debit card.

Customers will also earn loyalty points on debit card spend, with one point earned for every £1 spent in M&S in-store and online. Customers then receive £1 in M&S vouchers for every 100 points. Switchers also get a £100 gift card.

Account holders will be able to bank online and over the phone through a 24/7 UK call centre, as well as in the branches M&S has set up in some of its stores.

Colin Kersley, CEO, M&S Bank, says that "following the launch of the Current Account Switch Service, which has made switching faster and easier, we want to offer the same transparent banking and great service to a broader audience with the launch of the M&S Current Account."

M&S isn't the only one hoping to crack the UK current account market. Tesco is planning to enter the fray during the first half of this year and Virgin Money is also poised.

However, David Black of Consumer Intelligence is impressed with the M&S offering: "It's a good deal for those who regularly shop at M&S and its competitive overdraft rate coupled with no insistence upon any minimum monthly funding requirement will also serve to broaden its appeal."