Packaged bank accounts: beware these pricey offerings
Do your sums to see if “premium” bank accounts with benefits are worth paying extra for.


Monzo is the latest bank to launch a packaged bank account – a current account with added benefits. But instead of shaking up the market, as so many of the challenger bank’s other initiatives did, Monzo Premium is a good example of a bad account. In return for £15 a month, Monzo Premium users get a metal debit card, a 1.5% interest rate on balances up to £2,000, travel and phone insurance and discounted access to airport lounges.
Monzo made losses of £113.8m in the 2019-2020 tax year, so it has realised that “while it is cool to be young and disruptive, if you want to make money you have to behave like a grown-up. So it finds itself having to imitate... the dinosaurs of its industry, even if it means launching a rotten packaged account”, says Jessie Hewitson in The Times.
Monzo Premium fails the basic test of a packaged account: are the perks worth more than the fee? In return for paying £180 a year you can earn £30 interest, get a steel debit card you probably don’t care about, mobile-phone insurance with a £75 excess, and travel insurance. The only really worthwhile feature in there is the travel insurance, but you can get that cheaper elsewhere.
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For instance, Nationwide’s FlexPlus account costs £13 a month – £24 a year less than Monzo – but comes with better travel insurance. Monzo Premium’s account offers worldwide insurance covering medical bills up to £10m, cancellation cover up to £5,000 and lost valuables up to £750. Nationwide’s cover is similar, but it protects lost belongings up to £1,500. Moreover, the Nationwide account comes with UK and European breakdown cover worth £120 a year, plus mobile-phone insurance.
Getting a packaged bank account can really pay off for older travellers looking for good-value travel insurance. Monzo and Nationwide have an age limit of 69 on their travel insurance, although you can buy an age add-on with Nationwide.
Co-op’s Everyday Extra account costs £15 a month and offers worldwide travel insurance up to the age of 80 alongside UK and European breakdown cover and smartphone insurance. You can also earn £5 a month cashback, potentially cutting the annual cost to £120. Similar travel insurance for a 75-year-old would cost around £300 for a standalone policy.
When looking at packaged accounts check whether they have a joint account facility. Some “packaged accounts let you share the benefits with a partner, effectively doubling their value”, says David Byers in The Sunday Times. Monzo’s account can’t be held jointly, but Nationwide and Co-op’s packaged accounts can.
You don’t always have to pay for the perks of a packaged account with a monthly fee. Many banks also offer premium accounts to their wealthy customers. If you have a big salary or a large sum of savings or investments held with a bank you can access added extras on your current account.
For example, MoneySavingExpert rates HSBC’s Premier account. This offers worldwide family travel insurance with no monthly fee. You do have to have a salary of at least £75,000 plus a HSBC mortgage, investment or insurance product, or at least £50,000 held in savings with the bank.
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Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.
Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.
Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.
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