For a monthly fee, packaged bank accounts offer you benefits such as travel insurance, preferential rate overdrafts and more. But before you decide, be aware that these extras aren’t always worth the fee.
What are packaged bank accounts?
Packaged bank 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
- offers and discounts, such as airport lounge access.
Is a packaged bank account the best value for me?
These accounts might be good value for some people. But for others, the cost of the account might be higher than the cost of buying the benefits separately.
It’s important to always add up the value of the benefits and see if you can get them individually elsewhere for cheaper.
- 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. For example, your home insurance policy.
- 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. If not, you might find that your insurance is invalid and that you’ve been paying for something you can’t use.
Overdrafts
If a packaged account offers an interest-free overdraft, check if you’re currently paying overdraft fees and charges on a current account that are higher than the cost of the packaged account.
Are you considering switching to a packaged bank account just because you need an overdraft? Then first ask your bank if they can add one to your existing current account.
If you don’t use it often, staying with a free current account is probably the cheaper option.
Find out more in our guide Overdrafts explained
Shop around and compare packaged accounts with other bank 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 How to choose the right bank account.
These websites are 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.
For help choosing, find out more in our guide Current accounts
How to complain about a mis-sold packaged bank 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, find out how to make complaint in our guide Sort out a money problem or make a complaint.
If you think you were mis-sold your packaged bank account, you might be able to make a complaint and get your money back. For example, if your bank or building society failed to tell you that you didn’t qualify for any of the benefits,
Find out if you’ve been mis-sold, and how to make a complaint, on the Which? website
