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Top packaged bank accounts

What is a packaged bank account?

Chris Collier
Chris Collier | Edited by Helen Saxon
Updated 11 September 2024

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.

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

Packaged account best buys

What account benefits can you get with a packaged bank account?

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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.

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

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 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.

  • 1. 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.

  • 2. 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 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.

  • 3. 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.

  • 4. 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.

  • 5. 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.

Top packaged bank accounts

 Virgin Money.

 

Virgin Money Club M

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
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:
- Family mobile phone and gadget cover
- World family travel insurance (max age 74)
- UK & European breakdown cover for account holders

See full 'what the insurance covers' info.




Nationwide FlexPlus

 

Service rating: 87% 'great' 
 

Account info:

- Monthly fee: £13 (£156/year),
rising to £18 (£216/year) 1 Dec

- Minimum pay-in: None

- Overdraft: 39.9% EAR variable
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. Note: Nationwide has confirmed the FlexPlus account fee will be rising to £18/month (£216/year) on 1 December.

 

Key insurance info:
- Family mobile phone cover
- World family travel insurance
- UK & European breakdown cover for account holders

See full 'what the insurance covers' info.

The Co-operative Bank.

Co-op Bank
Everyday Extra

 

Service rating: 61% 'great'

Account info:

- Monthly fee: £15 (£180/year)
- Minimum pay-in: None

- Overdraft: 35.9% EAR variable
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. 


Plus, apply by 4 November and you'll get £15 a month paid into your account for three months – effectively giving you three 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)

See full 'what the insurance covers' info.

 

Halifax.

Halifax Ultimate
Reward

 

Service rating: 49% 'great'

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.

 

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:
- 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

See full 'what the insurance covers' info.

 


 

Club Lloyds Silver

 

Service rating: 54% 'great'

 

Account info:

- Monthly fee: £11.50 (£138/year)

- Minimum pay-in: 
£2,000/month (£3/month fee otherwise)
- Overdraft: 27.5% or 49.9% EAR variable (first £50 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).

 

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)
- 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

See full 'what the insurance covers' info.

See top banks for customer service for more on our service ratings.

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

HSBC.

HSBC Premier

 

Service rating: 49% 'great'

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 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.

Citibank.

Citigold current account


Account info:

- Monthly fee: None (£75 if you don't keep a minimum balance of £150,000 across Citi UK accounts)
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.

 

See top banks for customer service for more on our service ratings.

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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.

  • 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.

    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.

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