Top packaged bank accounts
What is a packaged bank account?
Packaged bank accounts are akin to Marmite in the world of finance – they’re either adored or disliked. While these accounts typically involve a monthly fee, they can potentially save you hundreds of pounds on services like breakdown cover, travel insurance, and mobile phone protection if used effectively. This guide will help you determine whether a packaged account suits your needs and will highlight some of the best options available.
Mis-sold a packaged account? Read Reclaim packaged bank account fees to see if you can get your money back.
Packaged account best buys
- Virgin Money, £12.50/mth – top for family cover
- Nationwide, £13/mth – top for service
- Co-op, £15/mth – top for older travellers
- Halifax, £19/mth – includes home emergency cover
- Lloyds, £11.50/mth – cheap option, but cover’s limited
What account benefits can you get with a packaged bank account?
Packaged bank accounts are checking accounts that generally come with a monthly fee in return for a range of insurance benefits. The specific perks you receive can differ depending on the provider, and these fees can sometimes be quite high, so it’s important to ensure that you will fully utilize the advantages before signing up.
Below, you’ll find comprehensive information about our top recommendations and the benefits they offer. Typically, the features of these accounts include:
- Mobile phone insurance
- Travel insurance
- Car breakdown cover
- Gadget insurance
- Other perks such as an interest-free overdraft or cashback at selected retailers
Read on to see if packaged bank accounts are right for you and how to make the most of them.
Packaged account need-to-knows
Packaged bank accounts often come with benefits like breakdown cover, mobile insurance, and travel insurance, all for a monthly fee. Before signing up for one, make sure to review these essential points to ensure this type of account meets your needs.
1 – To work out if an account’s worth it, check you NEED the insurance and if you can get it cheaper elsewhere
For certain individuals, paying a fixed monthly fee for travel insurance, smartphone protection, and breakdown coverage may not seem worthwhile. However, if you’re astute about reviewing policies and calculating expenses, these plans could ultimately save you money. Here’s an easy method to figure it out:
If you don’t require the insurance coverage or can find a better rate elsewhere, there’s no need to opt for a packaged account.
Begin by calculating the annual cost of the account by multiplying the monthly fee by 12. For instance, if the monthly fee is £15, that amounts to £180 per year. Next, check if you can acquire similar ‘freebies’ at a lower cost. For assistance, refer to our guides on Travel Insurance, Breakdown Cover, and Mobile Insurance. The policies offered with packaged accounts are typically premium options, so compare them with a standard policy to ensure it meets your needs.
If you find that you can save money, opting for a packaged account might be advantageous. However, if there’s no significant saving, you might find it more cost-effective to pay for insurance separately and choose a bank account with no fees.
2 – The perks are usually valid for all account holders for the same fee
You can often maximize the benefits of a packaged account by opting for a joint account. By doing so, both you and your partner will be covered under the same fee. Even if only one of you actively uses the account, adding a partner might still be advantageous. However, keep in mind that combining finances means your partner’s credit history could impact yours.
It’s important to evaluate the specific policies you need and explore if they might be more affordable through other options. Nevertheless, if both of you travel internationally, own vehicles, and use smartphones, a packaged account might offer substantial savings.
A warning about joint finances
Ensure you only open a joint account if you’re in a relationship where trust, care, and mutual respect are present. Never let a partner coerce you into sharing financial accounts, as this could be a warning sign of potential financial abuse, which is a type of domestic violence.
3 – Check insurance policies carefully for exclusions
An account that fails to provide payouts when required is essentially useless, so ensure you’re fully covered for your needs before committing.
Additionally, be cautious of potential upgrade fees. Adding winter sports coverage or family protection can be expensive, and you might end up paying significantly more than necessary. Opt for an account that meets your needs from the start, or consider separate insurance options to save money.
4 – Always declare any pre-existing medical conditions for travel insurance or they won’t be covered
Neglecting to disclose your medical conditions when applying for an account—or the associated travel insurance coverage—could result in your policy becoming void. It’s essential to inform the insurer about any conditions, even if you’re only undergoing tests.
Should you receive a diagnosis or experience any changes in your health after securing the policy, notify the insurer before you travel. They will determine whether your coverage remains valid and may apply an additional fee if necessary. This information will be reassessed annually throughout the duration of your account, although coverage terms might differ from year to year.
5 – Thousands have been mis-sold these accounts, but you can reclaim if so
This guide is designed to help you choose the ideal packaged account. However, it’s important to be aware that many individuals have held these accounts for years without fully utilizing their benefits, often because they were mis-sold.
If you find yourself in this situation, take a look at our Reclaim Packaged Account Fees guide. Anyone paying a monthly fee for their account should investigate whether they were mis-sold.
What counts as mis-selling?
For comprehensive details, refer to our reclaim guide. This information might be relevant to you if you were coerced into obtaining a packaged bank account without receiving complete information—such as being told it was necessary for securing a mortgage or overdraft—or if you were misled into believing no other bank accounts were available to you. Additionally, the fee might have been imposed without your awareness or approval.
When opening a new bank account, be vigilant for any monthly account fees and any associated insurance products, as these are common signs of a packaged bank account.
Those who feel they have been mis-sold can follow steps to reclaim their fees plus interest. This usually starts by contacting your provider. If you’re then not happy with their decision, you can escalate the complaint to the Financial Ombudsmen Service.
Top-pick packaged bank accounts
There are numerous packaged bank accounts available, but it’s essential to ensure that the one you select provides good value for your money. Verify that the features included are ones you will actually use and need.
Our recommended accounts offer comparable insurance coverage, so this isn’t a strict ranking. Instead, we evaluate the scope of coverage provided, outline the distinctive features of each account, and recommend who might benefit most from each option.
Make sure to thoroughly review what each account includes to choose the one that best fits your needs.
Top packaged bank accounts
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Service rating: 37% ‘great’ Account info: – Monthly fee: £12.50 (£150/year) – Minimum pay-in: None – Overdraft: 19.9%, 29.9% or 39.9% EAR variable |
Virgin Money, Top-pick packaged bank account for families.
The Virgin Money Club M has the lowest fee of our top-pick packaged accounts, and is especially good for families as you get cover for all family phones and gadgets (such as tablets and laptops), plus worldwide family travel insurance (max age 74). You also also get UK & European breakdown cover for the account holder(s). Equivalent policies bought separately would cost up to £500. Key insurance info: See full ‘what the insurance covers’ info. |
 Nationwide FlexPlusService rating: 87% ‘great’Account info: – Monthly fee: £13 (£156/year) – Minimum pay-in: None – Overdraft: 39.9% EAR variable |
Nationwide, Good option for families, but without gadget cover.
Nationwide’s FlexPlus offers similar cover to Virgin Money’s Club M account above, worth up to £500. Here, the whole family’s phones are covered, though gadget cover is not included. Its breakdown cover for account holders extends to UK AND Europe. At £13/month, it’s slightly more expensive than Virgin, though Nationwide is rated much higher for customer service, so could be worth considering. Key insurance info:
See full ‘what the insurance covers’ info. |
Co-op Bank Account info: – Monthly fee: £15 (£180/year) – Overdraft: 35.9% EAR variable |
Co-op, Good option for older travellers or couples.
The Co-op Bank Everyday Extra account provides travel insurance up to the age of 79 as standard (as always, declare any medical conditions). Note: the mobile cover isn’t for all the family, so is better suited to couples. We value the insurance at up to £400/year, based on similar policies. Key insurance info:
See full ‘what the insurance covers’ info.
Plus, you can currently get £160 FREE cash if you switch.
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Halifax Ultimate Account info: – Minimum pay-in: None (£1,500+/month for rewards) |
Halifax, Good if you want home emergency cover.
Another decent option is the Halifax Ultimate Reward account, especially if you’re already paying for home emergency cover and will make use of all the other insurances (worth up to £400/year). Like Co-op above, only account holders get mobile cover so it’s less suited to families. It’s £19/month, so a bit dearer than our other top picks, though if you’re willing to jump through some hoops there’s £5/month cashback up for grabs. Be sure to read full info. Key insurance info: See full ‘what the insurance covers’ info.
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Service rating: 54% ‘great’
Account info: – Monthly fee: £11.50 (£138/year) – Minimum pay-in: |
Lloyds, A cheaper option, though cover is more limited.
With the Club Lloyds Silver account you can choose an annual reward, including 12 months of Disney+ (with ads), six cinema tickets and more. It also offers fee-free spending and ATM withdrawals abroad (ATMs may charge their own fees). However, the cover is more limited than on the accounts above. For example, the family travel insurance is for UK and Europe only and stops at age 65, and the breakdown cover only includes roadside assistance in the UK. But if the cover is right for you, this is a cracking deal. To get the account you must pay in £2,000+ each month. If you can’t you have to pay an extra £3/month fee. Key insurance info: – Mobile phone cover for account holder(s) See full ‘what the insurance covers’ info. |
See top banks for customer service for more on our service ratings.
Top premium bank accounts
Although the accounts mentioned earlier come with a cost, many banks offer a ‘premium’ account option as well. These accounts are typically designed for individuals with high earnings (typically £75,000 or more) or those with substantial investments or mortgage commitments.
Premium accounts are often regarded as a middle ground between the fee-based accounts previously discussed and full private banking services. The benefits associated with these accounts can differ, but may include features such as insurance coverage, access to concierge services, or discounts on mortgages and other related products. Here are our top recommendations…
Top premium bank accounts
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Service rating: 49% ‘great’ Account info: |
HSBC Premier – Free worldwide family travel insurance with no monthly fee.The HSBC Premier account gives you worldwide family travel insurance up to age 69 (see full info on what the insurance covers). Plus, with this account you can transfer cash fee-free between different HSBC accounts you hold in different countries, and you also get discounts on other products, such as HSBC mortgages. |
– Monthly fee: None (£75 if you don’t keep a minimum balance of £150,000 across Citi UK accounts) |
Citigold – Free worldwide travel insurance, but high balance needed to keep it fee-free.The Citigold current account from Citibank offers worldwide family travel insurance to those who are 79 or younger (see full info on what the insurance covers). Plus, if you often bank in different currencies, Citi gives you free US dollar and euro accounts as well as your sterling account, plus fee-free transfers to other Citi accounts.
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See top banks for customer service for more on our service ratings.
Packaged bank account FAQs
Q – Who can open a packaged bank account?
A – To qualify for a packaged bank account, you generally need to be at least 18 years old and a resident of the UK. Additional eligibility criteria may apply depending on the types of insurance included in the package.
For instance, many packaged bank accounts offer travel insurance, which might exclude coverage for pre-existing medical conditions or impose an upper age limit. Likewise, gadget insurance may have restrictions on the types of gadgets covered, their value, and their age.
Certain providers might also require that you do not already hold other insurance policies or another packaged bank account when you apply. For detailed information about specific providers, check out our best buys section.
Q – Will I be credit-checked when applying for a packaged account?
A – Banks apply the same credit-scoring methods to evaluate customers for packaged accounts as they do for standard accounts. This means that if the account offers an overdraft facility, you’ll undergo a credit check just as you would with a regular account. To learn more about the process and what lenders consider, refer to our guide on Credit Scores.
Q – How does it work with reward payments and tax?
A – In addition to providing interest or bonuses for switching accounts, some current accounts now offer rewards for maintaining the account and fulfilling specific conditions, like depositing a specified amount monthly or having Direct Debits set up.
For example, the Halifax Reward Account pays out rewards with basic-rate tax already deducted, while others provide rewards without any tax deductions.
These rewards are categorized as ‘annual’ or ‘miscellaneous’ payments rather than savings income for tax purposes. Consequently, they do not affect your personal savings allowance, but they are subject to tax.
If you’re a non-taxpayer, you should claim back any tax taken using the R40 form. Higher and additional-rate taxpayers may need to pay more via tax returns.