Are packaged bank accounts worth paying for?

Packaged bank accounts can be very convenient, but do your sums carefully.

Nationwide is removing interest payments from its popular packaged bank account. From 1 November the FlexPlus current account, which costs £13 a month, will no longer pay 3% interest on balances of up to £2,500. The £250 fee-free overdraft facility on the account is going too, leaving customers paying an annual percentage rate (APR) of 39.9% if they stray into their overdraft.

So is the account still worth £156 a year? It comes with family travel insurance, including cover for winter sports and golf up to the account holder's 70th birthday.

This is "good cover" that "could easily cost £120 a year to buy on its own", says Miles Brignall in The Guardian. Account holders also still benefit from UK and European car breakdown cover, which could cost £110 a year if bought separately from the AA or RAC. But Nationwide has increased the excess on the mobile-phone insurance that comes with FlexPlus. It will be up to £75 if your phone is damaged or broken and up to £125 if lost or stolen.

On balance, customers should stick with it owing to the excellent travel insurance and car cover, reckons Brignall. But if you don't travel regularly, "there is a case for downgrading".

The changes are a blow to fans of packaged accounts, as the FlexPlus account had only just been named the best one. Independent consumers' organisation Which found that the perks were worth more than £300 a year, so customers could save £180 annually.

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"Packaged accounts can offer a cheaper and more convenient way for people to get insurance," says Jenny Ross in Which. Still, "not all are created equal. Some offer lower-quality cover and limited value for money". For example, Barclays Tech Pack account costs £174 a year, but offers no travel insurance or car breakdown cover, merely mobile-phone cover. After fees it saves you just £16 a year.

Before you opt for a packaged bank account, "think long and hard", says Kate Hughes in The Independent. "Question whether the fees are affordable, if you'd use the benefits and check for any cover or benefits you already have that do the same job."