Packaged bank accounts: beware these pricey offerings

Do your sums to see if “premium” bank accounts with benefits are worth paying extra for.

Monzo steel debit card
The steel debit card comes with expensive travel insurance
(Image credit: © Monzo)

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.

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Ruth Jackson-Kirby

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.