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.
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.
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.
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.
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.
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.
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.
To work out if an account's worth it, check you NEED the insurance and if you can get it cheaper elsewhere
The perks are usually valid for all account holders for the same fee
Check insurance policies carefully for exclusions
Always declare any pre-existing medical conditions for travel insurance or they won't be covered
Thousands have been mis-sold these accounts, but you can reclaim if so
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.
Account info: - Monthly fee: £15 (£180/year) - rising to £18 (£216/year) 1 July - Minimum pay-in: None
Good option for couples and 'free' for up to nine months.
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.
Plus you can currently get up to £175 to switch to Co-operative Bank. Factoring in the price rise on 1 July to £18/mth, this means you effectively get the first nine months for free.
Key insurance info: - Mobile phone cover for account holders - World family travel insurance (max age 79) - UK & European breakdown cover for account holder(s)
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: - Family mobile phone and gadget cover - World family travel insurance (max age 74) - UK & European breakdown cover for account holders
Account info: - Monthly fee: £18 (£216/year) - Minimum pay-in: None - Overdraft: 39.9% EAR variable (0% up to £50)
Good option for families and older travellers.
Nationwide's FlexPlus offers similar cover to the accounts above, worth up to £500. Notably, there's no maximum age limit for the travel insurance, so a real boon for older travellers.
Here, the whole family's phones are covered, though 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 more expensive than Virgin and Co-op Bank, though Nationwide is rated highly for customer service.
Key insurance info: - Family mobile phone cover - World family travel insurance - UK & European breakdown cover for account holders
Account info: - Monthly fee: £19 (£228/year) - Minimum pay-in: None (£1,500+/month for rewards) - Overdraft: 39.9% or 49.9% EAR variable (first £50 at 0%)
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 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.
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 .
Key insurance info: - Mobile phone cover for account holders - World family travel insurance (max age 70) - UK roadside breakdown cover for account holder(s) and eligible family members - Home emergency cover
Account info: - Monthly fee: £11.50 (£138/year) - Minimum pay-in: £2,000/month (£3/month fee otherwise, £5/month from 2 June) - Overdraft: 27.5% or 49.9% EAR variable (first £100 at 0%)
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) – 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.
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 (£5/month from 2 June). You can also get an extra £2/month discount if you pay in £4,300/month (£5,500 for joint accounts). The discount begins the month after the first full month you've had the account open and paid in the qualifying amount.
Key insurance info: - Mobile phone cover for account holder(s) - Europe and UK family travel insurance (max age 65) - UK roadside breakdown cover for account holder(s) and eligible family members – excludes home start & onward travel
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...
Account info: - Monthly fee: None (must have either £100,000/year income paid into the account; or have £100,000 saved/invested with HSBC) - Overdraft: £500 at 0%, then 39.9% EAR variable
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.
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.
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.
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.
Who can open a packaged bank account?
Will I be credit-checked when applying for a packaged account?
If you're considering getting this Co-op Bank Everyday Extra account, here's our review of what's covered, and how we've valued each element of the cover:
Worldwide family travel insurance
It allows multiple trips worldwide of up to 45 days per trip and includes winter sports (max 21 days in any 12-month period) and golf cover.
It'll cover you and your partner, even if it's not a joint account, up to your 80th birthday(s), though winter sports cover only applies until you turn 65. Children aged 22 and under are also covered provided they live at the same address (or are in full-time education) and are not married. There is no excess, so you won't need to pay a contribution if you make a claim. The cheapest similar family cover we've found elsewhere is from about £170/yr. If you're an older traveller, premiums rise sharply, so you could pay £250 or more for similar cover.
If you've a pre-existing condition, tell Co-op when you open the account as you may need to go through the insurer's medical screening process to see if it can cover you as standard. If not, you may be declined cover for that condition, or may have to pay an additional amount to cover it.
For more policy details, see the Co-op's travel insurance documents.
Mobile phone insurance
It covers repair or replacement after theft, loss, damage or breakdown of your phone (and the other account holder's if it's a joint account) anywhere in the world, up to a handset value of £1,500. You're also covered for accessories, eg, cases and headphones, up to £350, if they're lost, stolen or damaged at the same time as your phone.
You can make a maximum of two claims in a 12-month period per account holder. You'll need to pay a £75 excess on any claim. The cheapest similar smartphone insurance costs £60-£80/yr. If you've a joint account, that's £120-£160's worth – though policy pricing will depend on the make and model of the mobiles being covered, so your mileage may vary.
For more policy details, see the Co-op's mobile insurance documents.
Breakdown cover
It's provided by RAC and covers the account holder(s) in any car in the UK and Europe, including home assistance. Plus, everyone else travelling in your vehicle would be taken to their destination. Similar breakdown cover we've found elsewhere is from £100/yr.
If you're considering getting this Club M account, here's some more information about what's covered, and how we've valued each element of the cover. For full policy details, see Virgin's insurance documents.
Worldwide family travel insurance
The travel insurance allows multiple trips worldwide and includes winter sports, wedding and golf cover. It covers you and your partner up to the age of 75 (even if it's not a joint account) and up to four children under 18, providing they live at the same address or are in full-time education. The cheapest comparable family cover we've found elsewhere, which also covers winter sports and golf, is about £170 a year. If you've got an existing medical condition, you need to call AIG (the insurer Virgin uses) once your account is opened as you could be charged extra to cover it, or declined cover for that condition.
Family mobile phone and gadget insurance
The policy covers repair or replacement after theft, loss, damage or breakdown, insuring each device up to the value of £2,000. The excess varies per device – £75 for mobile phones, £50 for laptops or tablets and £25 for other gadgets (for example, smart watch, digital camera, sat-nav). It also covers devices owned by any relative that lives with you – though gadgets must be under five years old at the time you claim and you're limited to four claims a year (two mobile phone claims and two gadget/laptop claims). Similar smartphone insurance costs £50-£60/yr and about £180/yr for comparable gadget insurance. So if you're insuring four devices, that's £300-£320's worth – though policy pricing will depend on the makes and models of the tech being covered, so your mileage may vary.
UK & European breakdown cover (max eight call-outs a year)
It's provided by Green Flag, and gives cover for the UK & Europe including roadside and home assistance. Cover is for the account holder(s), travelling in any vehicle and up to eight other people travelling in that vehicle. Anyone driving your vehicle, with your permission, will also be covered.
If the car can't be repaired, Green Flag will take you to a garage of its choosing or you can choose a destination within 10 miles of the breakdown. Though note it has a 'fair use' policy that means you're limited to eight call-outs in any 12-month period – you'll be charged per call-out after this. Similar breakdown cover we've found elsewhere is from £100/yr.
Nationwide FlexPlus insurance cover – our review
If you're considering getting this Nationwide FlexPlus account, here's some more information about what's covered, and how we've valued each element of the cover:
Worldwide family travel insurance
The travel insurance allows multiple trips worldwide and includes winter sports, business, wedding and golf cover. It covers you and your partner (even if it's not a joint account) and dependent under 23, providing they live at the same address and are unmarried. The cheapest comparable family cover we've found elsewhere, which also covers winter sports and golf is around £170 a year.
If you've got an existing medical condition, you need to tell Nationwide as you may need a medical screening before getting cover and could be charged extra to cover it. This isn't necessarily the best deal on the market, so always compare with premiums in Cheap Travel Insurance.
Like with all insurance there will be nuances that mean you may be excluded at times, so check the full travel insurance policy wording for full info.
Family mobile phone insurance
The policy covers repair or replacement after theft, loss, damage or breakdown, insuring each handset up to the value of £2,000. The excess is £50 for damage or breakdown (£75 for Apple iPhones) and £100 for loss or theft (£125 for Apple).
Unusually, it covers the phones of your partner and children too, provided they live with you (children must be under 19 or under 22 if in full-time education, and cannot be married or in a civil partnership) – so maxed out, this gives serious value. You can make a maximum of four claims a year.
Similar smartphone insurance costs £60-£80/yr, so if there are four of you, that's £240-£320's worth – though policy pricing will depend on the make and model of the mobiles being covered, so your mileage may vary. See the mobile insurance policy document for more details.
UK & Europe breakdown cover
It's provided by the AA, and gives cover for the UK and Europe including home assistance and onward travel. Cover is for the account holder(s), travelling in any vehicle, and up to seven other people travelling in that vehicle (so everyone would be taken to their destination). Similar breakdown cover we've found elsewhere is from £100/yr.
Anyone driving your vehicle, with your permission, will also be covered.
Halifax Ultimate Reward costs £19/month (£228/year), but you also get a reward each month – you can choose from £5/month cash, a Vue cinema ticket, or three digital magazines (such as Men's Health, Cosmopolitan, Runner's World).
To get the monthly reward, each month you must: pay in £1,500+, stay in credit, and EITHER spend £500+ using the debit card OR keep £5,000+ in the account at all times.
If you're considering getting this Halifax Ultimate Reward account, here's our review of what's covered, and how we've valued each element of the cover:
Worldwide family travel insurance
It allows multiple trips worldwide of up to 31 days per trip and includes winter sports (max 31 days in one calendar year) and golf cover.
It'll cover you up to your 71st birthday, your partner, and any children under 19 (under 25 if in full-time education), providing they live at the same address. Kids travelling alone aren't covered. The excess (the amount you pay towards a claim) is £75 per adult, per claim. The cheapest similar family cover we found elsewhere is from about £170/yr, though if any of you are aged 65+, the comparable cost would be higher.
If you (or anyone else to be covered) has a pre-existing condition, tell Halifax when you open the account. You may need to go through a medical screening, which could result in the condition not being covered, or you having to pay an additional premium.
It covers repair or replacement after theft, loss, damage or breakdown of your phone (and the other account holder's if it's a joint account) up to £2,000. There's a £100 excess for all handsets.
You can make two successful claims per account holder per 12-month period. Similar smartphone insurance costs £60-£80/yr. If you've a joint account, that's £120-£160's worth – though policy pricing will depend on the make and model of the mobiles being covered, so your mileage may vary.
It's provided by the AA and covers you and your family in the UK including roadside assistance and home start. Cover is for the account holder and eligible family members, travelling in any vehicle, either as driver or passenger. The policy will cover you to be towed to a nearby repairer, or a destination of your choice if it's no further than the repairer. Similar breakdown cover we've found elsewhere is from around £120/yr.
Home emergency cover means it'll send round a professional to your home if there's a sudden unexpected incident there. So if for example your electrics fail, it'll cover an electrician coming out to fix them (up to a value of £250 each time).
The cheapest alternative policy we've found elsewhere is about £130/yr. For more policy details, see the Ultimate Reward account guide.
If you're considering getting this Lloyds Silver account, here's some more information about what's covered, and how we've valued each element of the cover:
UK and Europe family travel insurance
The travel insurance allows multiple trips in the UK and Europe and includes winter sports, business, wedding and golf cover. It covers you and your partner (even if it's not a joint account) and children under 18 (or under 24 if in full-time education). Kids travelling alone aren't covered. The cheapest comparable family cover we've found elsewhere, which also covers winter sports and golf, is around £120 a year.
If you've got an existing medical condition, you need to tell Lloyds as you may need a medical screening before getting cover and could be charged extra to cover it. This isn't necessarily the best deal on the market, so always compare with premiums in Cheap travel insurance.
It covers repair or replacement after theft, loss, damage or breakdown of your phone (and the other account holder's if it's a joint account) anywhere in the world, up to a handset value of £2,000. You're also covered for accessories, for example cases and headphones, up to £250, if they're lost, stolen or damaged at the same time as your phone.
You can make a maximum of two claims in a 12-month period per account holder. You'll need to pay a £100 excess on any claim. The cheapest similar smartphone insurance costs £60 to £80 a year. If you've a joint account, that's £120 to £180's worth – though policy pricing will depend on the make and model of the mobiles being covered, so your mileage may vary.
It's provided by the AA and covers you in the UK but with roadside assistance only (no home assistance or onward travel). Cover is for the account holder and eligible family members, travelling in any vehicle, either as driver or passenger. The policy will cover you to be towed to a nearby repairer, or a destination of your choice if it's no further than the repairer. Similar breakdown cover we've found elsewhere is from around £50 a year.
It covers you and your partner up to your 70th birthdays, including winter sports and business cover, for a maximum of 31 days per trip. Children under 18 (or under 23 if still in full-time education and living at home outside term-time) are covered if travelling with the account holder or staying with relatives abroad.
Pre-existing conditions may not be covered, so check before you travel. See the full policy document (link opens PDF).
