Packaged accounts

For a monthly fee, packaged accounts offer you benefits like travel insurance, preferential rate overdrafts and more. But these extras aren’t always worth the fee. Here’s what you need to know before you decide.

What are packaged accounts?

Packaged accounts offer a range of extras in exchange for a monthly fee.

The benefits vary by account, but you can often get:

  • Travel insurance
  • ID fraud insurance
  • Car breakdown cover
  • Mobile phone insurance
  • Commission-free foreign currency
  • A discounted – or interest free – overdraft
  • Preferential rates on other financial products

What to watch out for

  • The cost of the account might be higher than the cost of buying the benefits separately.
  • The insurance you get might be pretty basic – it might not give you the level of cover you need and you might already have cover through another product. Travel and life insurance might have age limits or exclusions that make them unsuitable for you.
  • Travel and life insurance might have age limits or exclusions that mean you might not be eligible to use it. For example, if you have any pre-existing medical conditions, you might be excluded from the travel insurance policy.
  • You might not need all the benefits attached to the account. If you won’t use all the benefits, its less likely to save you money.
  • With some banks or building societies, you have to activate each of the services before you can use them. Check whether you need to do this when you open the account, otherwise you might find that your insurance is invalid and that you’ve been paying for something you can’t use.

Should you choose a packaged account?

Packaged accounts can be a good deal for some, but they are not for everyone.

If you’re thinking of getting one, ask yourself:

  • How many of the extras do I really need?
  • Could I get the services separately for less?
  • Does the insurance give me the right amount of cover?
  • Do I already have cover through another product? For example, do you have cover through your home insurance policy.
  • If the account gives me an interest-free overdraft, am I currently paying overdraft fees and charges higher than the cost of the packaged account?

If you’re thinking about switching to a packaged account just because you need an overdraft, first ask your bank if they can add one to your existing current account.

If you don’t use it often, sticking with a free current account is probably the cheaper option.

For more on overdrafts, read our guide Overdrafts explained.

Shop around and compare packaged accounts with other accounts

Comparison websites are a good starting point for anyone trying to find a current account tailored to their needs.

Find out more about using comparison sites to find a bank account in our guide Finding the best deals with price comparison sites.

These websites are a good place to start in your hunt for a packaged bank account:

But be aware that comparison websites won’t all give you the same results, So make sure you use more than one site before deciding.

It’s also important to do some research into the type of product and features you need before making a purchase or changing supplier.

If your bank or building society moves you to a packaged account

Your bank or building society shouldn’t move you from a free account to a packaged account without your permission.

If your bank does move your account without your permission, or if you feel you’ve been mis-sold, find out how to make a complaint.

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