best packaged bank accounts

Top packaged bank accounts

Get £500+/yr of breakdown, travel & mobile insurance for £156/yr

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 then run you through the top-pick accounts.

Mis-sold a packaged account? Read Reclaim packaged bank account fees to see if you can get your money back.

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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 InsuranceBreakdown 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 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.

    Coronavirus exclusions on the account's travel policy are especially important to check. Most will cover it medically if you need treatment overseas, or if you need to cancel your trip as you've tested positive for coronavirus in the days before you were due to go.

    However, you generally won't be covered if your area has any local restrictions meaning you can't travel, or your destination has any limitations or warnings against travel. We've marked in each bank's review what the travel policy covers.

    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.

  • 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 bank account fee should check to see if they were mis-sold.

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Best buys: 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, especially if you're still driving less and taking fewer overseas trips.

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 check what each account covers to make sure you pick the one that's right for your circumstances.

Top packaged bank accounts

Top for families: Low £13/mth fee gets you up to £500 of mobile phone, travel and breakdown cover. Plus get a free £100 or £125 if you switch to it. Nationwide's FlexPlus has the lowest monthly fee of our top-pick accounts and is a very strong offering – IF you'll use the features. This account's a little unusual in that it covers the whole family's phones (most only give cover for account holders). And if you're happy to switch your existing current account to it, you can bag a free £100 (or £125), which effectively covers the fee for the first seven months – see full switch details for the criteria.



Nationwide
FlexPlus

 

 

 

Key insurance info:
- Family mobile phone cover
- World family travel insurance (max age 69, or 70+ with a £65/yr upgrade)
- UK & European breakdown cover for account holders

See full 'what the insurance covers' info.

Account info:
- £13 monthly fee (£156/yr)
- £100 or £125 bonus when you switch to Nationwide FlexPlus
- No minimum monthly pay-in
- Overdraft cost: 39.9% EAR variable
- 67% 'great' service rating
Top for families who want gadget cover too: £14.50/mth for £500-worth of family mobile, gadget and travel insurance. Plus get a £150 experience day voucher for switching. The Virgin Money Club M account offers similar family cover to Nationwide, but its mobile insurance extends to gadgets too (for instance, tablets/laptops). Its travel insurance also provides cover to a higher maximum age, plus it pays a decent rate of interest on up to £1,000 held in the account, which can offset some of the fee difference. The downside: the breakdown cover here is UK-only. Similar to Nationwide, Virgin Money also rewards switchers – here you can get a £150 experience day voucher – but see full switch details as you need to follow a few steps.



Virgin Money Club M



Key insurance info:
- Family mobile phone and gadget cover
- World family travel insurance (max age 75)
- UK breakdown cover for account holders

See full 'what the insurance covers' info.

Account info:
- £14.50 monthly fee (£174/yr)

- £150 experience day voucher when you switch to Virgin's Club M account

- No minimum monthly pay-in
- Overdraft cost: 19.9%, 29.9% or 39.9% EAR variable
- In-credit interest: 2.02% AER variable on up to £1,000

Top for older travellers and couples: £15/mth for £400 worth of mobile phone, travel and breakdown cover  though you can make it cheaper. The Co-op Bank Everyday Extra provides travel insurance up to the age of 79 as standard (though as always, do declare any medical conditions) and offers up to £2.20 back in cashback if you jump through some hoops every month. If you can commit to this, it's then cheaper than Nationwide and Virgin above – though the mobile cover isn't for all the family, so is better suited to couples.



Co-op Bank
Everyday Extra

 

 

 

 

Key insurance info:
- Mobile phone cover for account holder(s)
- World family travel insurance (max age 79)
- UK & European breakdown cover for account holder(s)

See full 'what the insurance covers' info.

Account info:
- £15 monthly fee (£180/yr)

- Up to £2.20/mth back for meeting five conditions each month

- No minimum monthly pay-in (or £800 for cashback)

- Overdraft: 35.9% EAR variable (max £60/mth)
 - 69% 'great' service rating

Good if you also want home emergency cover: £400+/yr of mobile, travel & breakdown cover for £17/mth (though you can make it cheaper). 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. You can get £5/mth back to help offset the fee, though there are a decent number of hoops to jump through – see details below. Like Co-op above, it's good for couples who use it as a joint account, but not necessarily a family as only account holders get mobile cover.

productbox-Halifax.png

Halifax Ultimate
Reward

 

 

 

 

Key insurance info:
- Mobile phone cover for account holder(s)
- World family travel insurance (max age 70)
- UK breakdown cover for account holder(s)
- Home emergency cover

See full 'what the insurance covers' info

Account info:
- £17 monthly fee (£204/yr)

- £5/mth back (or other rewards) if you meet certain conditions
- No minimum pay-in unless you want rewards - see above
- Overdraft: £50 at 0%, then 39.9% EAR variable
- 55% 'great' service rating

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.

These 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 are our top picks...

Top premium bank accounts

Free worldwide family travel insurance with no monthly fee, though you need a high salary or high savings to get the account. Plus switchers can bag £110 in cash and a £30 voucher. On top of all that, the HSBC Premier account also lets you transfer cash fee-free between different HSBC accounts you hold in different countries, and gives you discounts on other products, for instance, HSBC mortgages. If you want the switch bonuses, you'll need to meet a few conditions – see full switch criteria.


HSBC Premier
Key insurance info:
- World family travel insurance (max age 69). See more info on what the insurance covers
.
Account info:
- No monthly fee
- £110 cash + £30 voucher when you switch to HSBC Premier
- Must have either £75,000 annual income + a mortgage, investment, life insurance or a protection product with HSBC; or have £50,000 saved/ invested with HSBC
- Overdraft cost: £500 at 0%, then 39.9% EAR variable
Free worldwide travel insurance, but high balance needed to keep it fee-free. If you have cause to bank in different currencies, the Citigold Current Account from Citibank could be a good option. You get free US dollar and euro accounts as well as your sterling account, plus fee-free transfers to other Citi accounts, on top of the travel insurance.


Citigold Current Account
Key insurance info:
- World family travel insurance (max age 79). 
See more info on what the insurance covers.

Account info:
- No monthly fee (or £75/mth)
- Must keep a minimum balance of £150,000 across Citi UK accounts. If not, you pay a monthly fee

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Packaged bank account FAQs

  • 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.

    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.

  • Some packaged accounts, such as Halifax Ultimate Reward, pay their rewards with basic-rate tax already deducted.

    With the introduction in April 2016 of the personal savings allowance (PSA), meaning interest is now paid tax-free, some people hoped that they'd see an increase in the reward amounts paid to them.

    But these 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.

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