Top packaged bank accounts
What is a packaged bank account?
Packaged bank accounts are the Marmite of banking – some love 'em, some hate 'em. They usually have a monthly fee but, used right, they can save you £100s off the cost of breakdown, travel and mobile insurance. Our guide will help you check if a packaged account is right for you, and show you the top-pick accounts.
Mis-sold a packaged account? Read Reclaim packaged bank account fees to see if you can get your money back.
Packaged bank accounts best buys
-
Top packaged bank accounts
Santander, FREE £200, £17/mth – top all rounder + 1% cashback + 11mths 'free'
Nationwide, FREE £175, £18/mth – top for older travellers + 9mths 'free'
Virgin Money, £12.50/mth – top for family cover -
Top premium bank accounts
Barclays Premier – free perks but needs high salary or investments
What benefits can you get with a packaged bank account?
Packaged bank accounts are current accounts that typically charge a monthly fee in exchange for various insurance benefits. What you get varies by provider and the monthly fee can sometimes be significant, so you should make sure you'll make the most of the perks before opening one.
Just like a normal current account, packaged bank accounts allow you to receive and send money, make payments, pay bills via Direct Debit and more.
Find full details of our best buys and what they offer below, but some of the account benefits usually include:
Mobile phone insurance
Travel insurance
Car breakdown cover
Gadget insurance
Other perks such as an interest-free overdraft or cashback at selected retailers, or fee-free debit card purchases abroad
Read on to see important information on whether packaged bank accounts are right for you and how to make the most of them.
Packaged account need-to-knows
Packaged bank accounts usually provide breakdown cover, mobile and travel insurance for a monthly fee. But before you get an account, read these need-to-knows – they'll help you check this type of account is right for you.
To work out if an account's worth it, check you NEED the insurance and if you can get it cheaper elsewhere
For some, travel insurance, smartphone cover and a breakdown policy for a fixed monthly fee won't be worth it. But if you're savvy enough to check policies and work out costs, they can SAVE you money. There's a simple way to work it out:
If you don't need the insurances, or can insure cheaper elsewhere, don't bother with a packaged account.
Start by multiplying the monthly cost of the account by 12 – for example, £15/month is £180/year – then see if you can buy the 'freebies' for less. To help, see our Travel Insurance, Breakdown Cover and Mobile Insurance guides. The policies included with packaged accounts are deliberately high-end, so compare whether a decent standard policy covers what you'll need.
If you'd make a saving, a packaged account might be worth it for you. If you wouldn't, paying for cover separately and plumping for a fee-free bank account could work better.
The perks are usually valid for all account holders for the same fee
With most packaged accounts you can max the value by opening it as a joint bank account. Doing it this way means you're both covered, for the same fee. So even if you won't both use the account, adding a partner can make sense – though be aware that joining finances means their credit record can affect yours.
You should still consider what policies you actually need, and whether you could get them cheaper elsewhere, but if you both travel worldwide, own cars and have smartphones, a packaged account could save you money.
A warning about joint finances
Only do it if you're in a financially trusting, caring, non-abusive relationship. Don't ever feel pressured by a partner into getting a joint account, it can sadly be a precursor to financial abuse – a form of domestic violence. For help and info, see Martin's Financial abuse & joint accounts blog.
Check insurance policies carefully for exclusions
If the account won't pay out when necessary, it's worthless, so always check you're covered for what you need before signing up.
Plus always watch out for upgrade charges. If winter sports and family cover aren't included, adding them can have hefty costs and you could find you're spending far more than you need to. Instead, choose a more suitable account to begin with, or save by insuring separately.
And once you do sign up, always make sure you check the policy documents carefully.
Always declare any pre-existing medical conditions for travel insurance or they won't be covered
Failing to declare conditions when applying for an account – and therefore, the travel insurance cover, too – may invalidate the policy. You need to call the insurer and tell it, even if you're just having tests for a condition.
If you're diagnosed, or anything changes after the policy has been taken out, tell the insurer before you travel. It'll decide if it'll still cover you, with or without an additional charge. This will be reviewed annually, for as long as you hold the account, although it may not provide cover under the same conditions each year.
See our Travel insurance for pre-existing conditions guide for more info.
Thousands have been mis-sold these accounts, but you can reclaim if so
This guide's about how to pick the best packaged account. But it's worth noting that many people have had them for years without being able to use the benefits, essentially because they were mis-sold the account.
If that's you, see our Reclaim packaged account fees guide. Everyone who pays a monthly account fee should check to see if they were mis-sold.
What counts as mis-selling?
Full information can be found in our reclaim guide, but this could apply to you if you were pressured into getting a packaged bank account without being given full information (for example, you may have been told it was a requirement to getting a mortgage or overdraft), or that there were no other suitable bank accounts you could open instead. The fee may also have been added without your knowledge or consent.
If you're opening a new bank account, keep an eye out for whether there's a monthly account fee and whether there are any linked insurance products – these are usually indicators that it's 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 a whole host of packaged bank accounts out there, but you have to be careful that the one you choose gives you value for money, so do be sure that you need the account features and would have used them anyway.
All of our top picks offer similar cover in terms of the insurance policies themselves, so this isn't a strict ranking. Instead we look at who's covered by the insurance, then highlight the features of each account and suggest who it could be best for.
Do double-check what each account covers to make sure you pick the one that's right for your circumstances.
Free for several months if you switch. | |
Service rating: 55% 'great' Account info: | FREE £200 cash on a £17/mth account means you effectively get 11 months free. To get the FREE £200 switch bonus, you must move over (or quickly set up) 2+ active household Direct Debits and pay in £1,500+ within 60 days. The Edge Explorer costs £17/mth but provides more cover than Lloyds above, including worldwide family travel insurance (max age 74), family mobile phone cover and UK & European breakdown cover for account holder(s). There are a host of extra perks: - 1% cashback on most household bills paid by Direct Debit (max £10/mth). So this is a strong choice if you'll use it as your main account, including bills and spending. The Edge Saver pays 6% on up to £4,000 for the first year – maxed out, that's around £240/year interest. See full info. |
Service rating: 90% 'great' Account info: | FREE £175 cash on an £18/mth account means you effectively get nine months free. You can get a FREE £175 to complete a switch from a non-Nationwide current account into a new or existing Nationwide FlexPlus account with 2+ Direct Debits. You must complete the switch within 28 days of starting it, plus pay in £1,000+ and make at least one payment using the debit card within 31 days of requesting the switch. The account offers travel, breakdown and mobile phone insurance worth up to £500. Notably, there's no maximum age limit for the travel insurance, so a real boon for older travellers. The whole family's phones are covered, though, unlike other accounts in this guide, gadget cover is not included. Its breakdown cover for account holders extends to UK & Europe. There's also a small 0% overdraft 'buffer' on up to £50. At £18/month, it's on the more expensive side of our top picks, though Nationwide is rated highly for customer service. Key insurance info: See full info. |
Comprehensive cover, good for families & couples. | |
Virgin Money Club M | 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 info. |
Service rating: 37% 'great' | Good if you want home emergency cover. At £19/month, the Halifax Ultimate Reward account is the most expensive of our top picks. But it's still a decent option, 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 for that – though its breakdown policy provides cover for eligible family members, so will be better value if there are multiple drivers in your household. Key insurance info: See full info. |
Service rating: 55% 'great' | A decent option for 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 who operate the account jointly. We value the insurance at up to £400/year, based on similar policies. Key insurance info: See full info. |
Service rating: 49% 'great' Account info: | Lower fee but less cover. 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) – this is also available on Club Lloyds and Club Lloyds Platinum. 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. Key insurance info: |
Top premium bank accounts
While you can pay for the accounts above, most banks also have a 'premium' account. This is generally for people earning high salaries (usually £75,000+) or who have significant investments or mortgage borrowing.
Premium accounts are generally seen as a halfway house between the paid-for accounts above, and proper private banking. Perks associated with the accounts vary. Some include insurance, access to concierge services, or discounts on mortgages or other associated products. Here is our top pick...
Service rating: 42% 'great' Account info: | Blue Rewards perks fee-free. The Barclays Premier account comes with Barclays Blue Rewards as standard (normally £5/mth). This means you get a free Apple TV+ subscription (normally £9.99/month) and free Major League Soccer Season Pass subscription (normally £14.99/month), plus access to a 4.21% saver you can put up to £5,000 in (maxed out, it's £207/year interest, though it can be beaten by top savings). |
Service rating: 49% 'great' | Free worldwide family travel insurance with no monthly fee. The HSBC Premier account gives you worldwide family travel insurance up to age 69 (see ). 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. |
See top banks for customer service for more on our service ratings.
Packaged bank account FAQs
Who can open a packaged bank account?
To get a packaged bank account you typically have to be over 18 and live in the UK. There may also be other eligibility requirements concerning the different types of insurance you're signing up for.
Many packaged bank accounts come with travel insurance, for example, which can come with exemptions for pre-existing conditions or a maximum age limit. Similarly with gadget insurance, there may be limits on what you can insure, its value and its age.
Specific providers may also ask that you don't have existing insurance policies or an existing packaged bank account when you sign up. See our best buys for more information on individual providers and our How to open a bank account guide for general info.
Will I be credit-checked when applying for a packaged account?
Banks use the same credit-scoring procedures – where they assess whether they want you as a customer – for packaged accounts as they do with normal accounts and credit cards.
So if the account includes an overdraft you'll be credit-checked in the usual way. For more info on how this works, and what lenders are looking for, see Credit Scores.
How does it work with reward payments and tax?
The personal savings allowance (PSA) means you can earn up to £1,000 from savings interest without paying tax. However these reward payments don't count as savings income for tax purposes and instead are classed as 'annual' or 'miscellaneous' payments. This means the rewards don't count towards your PSA, and they're still liable to be taxed.
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.
Other top MSE banking guides...
Top bank switch offers: Make cash switching bank.
Need a business bank account?: For the self-employed
Basic bank accounts: For those with poor credit histories
Digital banking: Learn about app-based banks
Ethical banking: Can you do good with your bank account?
Best way to send money internationally. If sending cash abroad.
Share this guide?
