Packaged bank accounts are current accounts that come with benefits and charge a monthly fee.
You’ll usually be charged between £10 and £45 a month to hold one, opening up a host of perks.
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The bank will decide which perks are offered, and how much the account costs, so it’s worth shopping around for the deal that matches your needs the most.
While the best account for you will depend on what perks you will use, we’ve rounded up some of the top accounts on the market right now.
The best packaged bank accounts
What kinds of perks do packaged bank accounts offer?
The types of benefits that come with packaged bank accounts vary depending on the bank or building society.
However, these are some common ones you may receive, for a monthly fee:
- Travel insurance – cover may be for you, plus your family members, and for Europe-based or global travel.
- Mobile phone insurance – you may be able to get family-wide cover or just for yourself, covering loss or damage to a phone.
- Breakdown cover – depending on the bank or building society, you may be covered for just the UK, or further afield. The cover may be for roadside assistance or include onward journey cover as well.
- Other perks – the account might come with free cinema tickets, subscriptions to streaming services, magazine subscriptions and cashback.
What to consider before opening a packaged bank account
Ultimately, you need to figure out whether you will use all the perks that come with a packaged bank account, thereby making it good value for money.
Don’t be lured in by the promise of a host of benefits that are useless to you.
Sarah Coles, senior personal finance expert at Hargreaves Lansdown, said: “Packaged bank accounts can be a brilliant way to save money on all sorts of things, from travel insurance to breakdown cover.
“Alternatively, they can be a horrible way to leak cash from your current account in exchange for perks you don’t need or can’t use.
“It means you need to go in with your eyes open, and check carefully whether a packaged account will work for you.”
Check the terms and conditions for exclusions
It’s worth drilling into the specific terms and conditions of a packaged bank account and checking for any exclusions.
Don’t just look at the headline offer as, depending on your age or other specific detail, you may not actually qualify for a perk.
Coles added: “One thing to check is where in the world the travel insurance covers – and whether it’s worldwide or limited to Europe.
“Also take a look at the maximum age for travel insurance cover, as some won’t cover older customers.
“You also need to declare medical conditions on your travel insurance. This includes all sorts of things you may not think of – like past broken bones and conditions like asthma and depression.”
Once you’ve signed up for a packaged bank account, keep an eye on the terms and conditions, as your bank or building society might quietly drop perks from the offer while keeping the price the same.
Are you already paying to get the same services?
Make sure you don’t already pay or get the benefits elsewhere. For example, have you got breakdown cover included in your car finance package or car insurance? There’s no point in doubling up on cover – you can’t claim twice.
Double-check you will actually save money before signing up, too. If you were to pay for the service separately, could it work out cheaper than the account fees?
Does the account suit you?
You should also check if the bank account is suitable for your needs. For instance, if you want to access a branch, is there one local to you? Does it have the overdraft you need?
How to work out whether a packaged account is good value
Working out if a packaged bank account offers value for money is straightforward: take the monthly charge and multiply it by 12 to get the annual cost. Then shop around to see what the benefits would cost you separately.
If the packaged bank account costs less, then it is good value. Just make sure you repeat those processes each year rather than sticking with a packaged account for years that may no longer offer you good value.
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