Branches will be open during store hours, and customers can pre-register their interest in a current account, launching in the autumn.
The latest venture by a big retailer is a reminder that if you want to borrow money or open a cash Isa, you don't have to pop into a high-street bank or building society. Instead, you could try your local supermarket. Asda, the Co-op, Marks & Spencer, Sainsbury's, Tesco and Waitrose all offer financial services as well as fruit and veg – though M&S has now taken a lead with in-store banking and a current account.
Kevin Mountford, head of banking at Moneysupermarket.com, says: "The supermarket banks stack up well against the main banks and building societies, often appearing in the best-buy tables for credit cards, loans and savings.
"However, they are not yet geared up to transact business in store, so you have to be happy to run any accounts online or over the telephone."
So is it a good idea to save as well as shop at the supermarket?
The Sunday Herald has put the big brands to the test.
The Co-op, M&S, Sainsbury's and Tesco all offer loans as well as credit cards. If you want to borrow £7500, M&S, Sainsbury's and Tesco would charge 6% – the lowest rate on the market.
There are no arrangement fees but you will almost certainly have to pay an early settlement fee if you decide to pay off your loan early.
Sainsbury's and Tesco also top the table if you are looking for a smaller loan. Sainsbury's charges a typical rate of 7.6% on a £5000 loan, while Tesco charges 7.8%. And all three retailers are in the top five for bigger loans of £10,000.
Sylvia Waycot of Moneyfacts says: "Supermarket banks have thrown themselves into becoming realistic rivals to the traditional high-street names. There is also an additional layer of competitiveness between Sainsbury's and Tesco in the loans and credit card market. These two giants often seemingly compete to out-do each other, which is great news for anyone looking for a good deal."
Supermarket savings rates are not particularly impressive. For example, Tesco's easy-access Internet Saver pays 2.80%, which includes a bonus of 1.55 percentage points for 12 months. Several accounts pay a higher rate of 3% or more. Top of the league is the Post Office at 3.17%.
Sainsbury's offers two easy-access accounts. The eSaver Special pays 2.7% on a minimum deposit of £1000, or you can earn 2.5% in the Extra Saver with a minimum deposit of £1. Rates at the Co-op are even lower.
Savers can usually earn more interest in a fixed-rate account. Tesco pays up to 3.2% over one year, 3.6% in its two-year fixed-rate saver, or up to 3.7% if you can lock your money away for three years.
Sainsbury's has just issued a new range of fixed deals with rates ranging from 3.15% for one year to 3.75% for three years.
The fixed-rate accounts are not the best on the market – Virgin Money pays 3.3% on a one-year bond, or you can fix for three years at 3.9% with Clydesdale bank. But the fixed deals from Tesco and Sainsbury's are certainly not the worst.
If you want to open a cash Isa, The M&S Advantage at 3% is among the best, especially with a minimum deposit of just £100. You can squeeze a higher rate out of Santander as its Direct Isa pays 3.30%, but the rate could plunge to 0.5% after one year.
The Co-op, John Lewis (which owns Waitrose), M&S Money, Sainsbury's and Tesco offer normal credit cards but their advantage is loyalty points.
The John Lewis Partnership card charges 0% on purchases for six months – the typical standard rate is 16.9%. You collect 1 point for every £1 spent at John Lewis and Waitrose, plus 1 point for every £2 spent elsewhere. Every 500 points are converted into John Lewis or Waitrose vouchers worth £5. The M&S Money credit card charges zero interest on purchases for 15 months, with a typical standard APR of 15.9%.
Sainsbury's Nectar credit card charges 0% on balance transfers for 15 months, with a 3% balance transfer fee, and 0% on purchases for six months. The standard rate on the card is 16.9%, but cardholders earn double Nectar points for the first two years on Sainsbury's shopping.
You don't earn Nectar points with the supermarket's standard credit card, but you do pay 0% interest for 12 months on purchases and balance transfers, with a typical standard rate of 16.9%. Or there's the Low Rate credit card at 6.9%, with no introductory 0% deal. Sainsbury's also offers a Gold Credit Card with a £5 monthly fee.
If you shop at Tesco, you might prefer the Clubcard credit card. It offers two versions – 0% on purchases for 16 months and balance transfers for nine months, or 0% on transfers for 18 months and purchases for three months. The transfer fee is either 2.9% or 3.95% and both cards revert to 16.9%.
Sainsbury's Low Rate card is the top low-rate card on the market, according to Moneyfacts. For best-buy 0% purchase cards, M&S Money and Tesco Bank are beaten only by NatWest. Sainsbury's standard credit card makes it into the top 10 for purchases, and the top five for combined offers.