Compare Packaged Current Accounts
- Packaged current accounts offer the usual day-to-day banking services alongside a range of additional benefits
- Benefits vary between accounts but may include breakdown cover, travel insurance, retail offers and more
- Compare up-to-date information on account features to find your ideal package current account
What is a packaged bank account?
A packaged bank account is a current account with added benefits. Usually for a monthly fee, cover you might otherwise buy separately, such as travel insurance, mobile phone insurance and breakdown cover, may be included in the package. You may also get banking benefits, such as preferential overdraft rates and commission-free cash withdrawals abroad, along with cashback and discounts.
As names like ‘plus’, ‘platinum’, ‘premium’, ‘flexplus’ and ‘gold’ suggest, they are upgraded versions of a current account, which bundle extras for a monthly fee.
What’s included in a packaged bank account?
There is no standard packaged bank account, so the extras you get will depend on the specific deal. Reading the small print is key, along with comparing accounts from different providers, but the benefits might include:
- travel insurance
- mobile phone insurance
- gadget cover
- home emergency cover
- breakdown cover
- commission-free withdrawals overseas
- discounted or interest-free overdrafts
- cashback and cash rewards
- in-credit interest
- discounts on leisure activities and partner deals
If two banks offer the same type of insurance, it doesn’t necessarily mean you will get the same level of cover with both. So you might get worldwide travel insurance for your whole family with one, but just Europe with another, or it may be that just your mobile is covered, not your kids’ phones.
Some offer breakdown cover for the UK and Europe, others just the UK, and some have a cap on how many callouts you can have in a year. Consider what is important to you and understand exactly what is included, so you get the best deal for your monthly fee, and the insurance cover that is right for you.
The benefits of a packaged bank account
There are a few reasons you might consider a packaged bank account:
- It could save you money if you need the extras, such as mobile phone insurance or home emergency cover, and would otherwise buy them elsewhere.
- It’s convenient, as you’ll save the time you would take buying insurance policies from other providers, or which you may not even get around to taking out, but end up needing.
- You will have one point of contact to access a number of policies.
- You may get cashback on transactions, such as debit card purchases and direct debits, and perks, such as leisure discounts and airport lounge access.
- If it is a joint packaged account, you and your partner may be able to share the cover at no extra cost, which means two people for one fee – although bear in mind there are risks that come with shared accounts when it comes to liability for debt.
- You may get cashback just for switching from your current bank to another provider’s packaged account.
- Some banks offer levels of packaged accounts, with different monthly fees, so you can choose the one that’s most cost-effective for you, bearing in mind the features you’ll use.
The disadvantages of a packaged bank account
Here are a few points to bear in mind before you take out a packaged bank account:
- You will usually pay a monthly fee for a packaged account, so make sure it’s affordable.
- The cost of the account may be more than if you bought the benefits separately. Check the cost of the same services if you bought them elsewhere and had a fee-free account.
- The level of cover you get may be different from a standalone policy. So like any insurance, read the small print, and check if an excess applies if you make a claim.
- The benefits may not be automatic, and you may have to activate services – registering your mobile for the cover to be valid, for example.
- If you won’t use all the benefits included, maybe because you already have travel insurance or don’t drive, it may not offer the best value. You may already have home emergency cover or mobile insurance as part of your home contents insurance policy, so always check.
- You may not be eligible for certain benefits. The account provider should make the exclusions clear, but if you are older, check the maximum age the insurance goes up to, and declare any pre-existing medical conditions. Upgrades may be available, but you will pay more.
- There may be a minimum monthly amount that you must pay into the account, or a minimum spend, or you may need to log in a minimum number of times a year.
Your bank should send you an annual statement that explains the eligibility requirements of your insurance policies, and what’s included with your account. This is also a good chance to make sure the package is still right for you.
If your circumstances change, for example being diagnosed with an illness that might affect your travel insurance, make sure you update your insurance policy.
Should I get a packaged bank account, and is it worth it?
Before you buy a packaged bank account, you’ll want to ask yourself:
- Would I take out these extras if I didn’t have this account?
- Will I use the breakdown cover or travel insurance?
- How much would the insurance cover cost if I bought it elsewhere? Would it add up to less than the fee charged?
- Am I already covered for some of the benefits on another policy? You can only claim on one policy.
- Do I need an account that insures my whole family?
- Do I need the overdraft that’s included on application?
- Does a good interest rate on my current account matter?
Weighing up the costs against the benefits will help you decide if a packaged account is worthwhile and cost-effective for you. Decide which features you could take or leave, so you get the best packaged bank account for you.
You might want to multiply the monthly fee by 12 to get an annual fee, so it’s easier to compare insurance from other providers against what you’d pay for a packaged account.
Can I apply for a joint packaged account?
You can open a joint packaged bank account with your partner, a family member or a friend, if they also meet the eligibility criteria. This may offer good value for money because you will only need to pay one fee for two account holders to access the same benefits.
Shared accounts come with risks, though. If one joint account holder has a bad credit rating, it could affect the other person’s credit rating. You are both liable for any debt associated with the account, so if you are overdrawn, you will both be responsible for paying the money back.
How to apply for a packaged bank account
First, check you meet the eligibility criteria. This will vary according to provider, but you will need to be 18 or over and a UK resident. When you apply, you’ll need to present a form of identification, such as a valid passport or driving licence, or a bank card if you are an existing customer.
Your credit history, income and how much you will likely pay into the account each month may also be considered.
How you apply depends on the provider, but it could be online, through a mobile app, or in person at a branch. It can also depend if you are upgrading an account you already have with that provider.
Alternatives to a packaged account
The main alternative to a packaged account is a current account with no monthly fee, and taking out separate policies for any insurance cover you need with other providers. For some, this may be a better value option because it’s about what features are important to you.
So if you’re only interested in free withdrawals overseas, or monthly cashback, and can leave the insurance and other benefits, you may find a standard current account does the job.
» COMPARE: Current accounts with no monthly fee
How NerdWallet’s packaged bank account comparison works
Use our table to compare packaged bank account deals and see:
- monthly fees charged
- interest rate on balances
- representative APR on arranged overdrafts
- minimum monthly credit requirements
- if you manage the account by app, online or in branch
- additional perks that are included with the account
Then just click through to the provider when you have found the deal for you and start your application.
Packaged Bank Accounts FAQs
Will I be credit checked when applying for a packaged account?
It depends on the provider, but like a standard current account, you will usually need to go through a credit check to be offered a packaged bank account. This helps them decide on your application, as your credit rating shows how you’ve handled credit in the past.
A higher credit score will increase your chances of having your application approved. Failed credit applications can damage your credit score, making it harder to borrow in the future.
If it’s a joint account, both applicants will be credit checked.
» MORE: How to improve your credit score
How does coronavirus affect packaged account travel insurance?
Since the pandemic, insurers have adjusted their travel insurance policies. So if you have travel insurance included with your account, check for coronavirus exclusions so you know what won’t be covered.
Travel insurers should still provide cover for emergency medical treatment when you’re abroad, including if it’s related to coronavirus. But you are unlikely to be covered if you travel against Foreign, Commonwealth & Development Office travel advice or government guidance on travel within the UK. Also, travel insurance won’t cover costs associated with quarantining.
You may be covered for cancellations if you receive medical advice not to travel. But policies bought or renewed, or trips booked after the pandemic are unlikely to cover cancellation due to coronavirus, including self-isolation.
Check your updated policy documents, and read the latest government advice before you book a new trip or travel.
How do reward payments and tax work with a packaged account?
Monthly reward payments paid into your account are usually taxed by HMRC, as they are seen as annual payments, not interest on savings. If your bank doesn’t deduct tax at source from reward payments, you may have tax deducted via your tax code. If you already complete a self-assessment tax return, you may need to declare any taxable rewards in your tax return.
If you think you have overpaid or underpaid tax on rewards, perhaps because you are a non-taxpayer or higher-rate taxpayer, contact HMRC.
You won’t be taxed on cashback rewards on spending, and most UK savers don’t have to pay any tax on interest. The personal savings allowance (PSA) means basic-rate taxpayers don’t have to pay tax on the first £1,000 of their savings income, and higher-rate taxpayers pay no tax on the first £500 of their savings income. There is no personal savings allowance for additional-rate taxpayers.
What is a premium bank account?
Premium bank accounts are a level up from packaged accounts, but are not quite as exclusive as private banking when it comes to what they offer. If you want a few extras, such as access to a personal banking team, concierge services, and special rates for mortgages, loans and savings, along with insurance, you could consider a premium account.
Some charge no monthly fee, but there is a catch: you will usually need a minimum annual income of £75,000, or a substantial minimum balance or amount saved or invested with the bank to apply. You may also need to have another product with the bank such as life insurance.
What if I was mis-sold a packaged bank account?
If you think you were mis-sold a packaged bank account, get in touch with your bank to see if it is willing to put things right.
Perhaps you were unaware of what you were signing up for, had no idea how much it would cost, or you feel you were misled or pressured into it. Or maybe you weren’t eligible for some of the benefits and it wasn’t made clear. Whatever the reason, give your bank as much detail as possible about what you feel you have paid unfairly, and for how long. If you are not sure where to start, template letters online can help.
If your bank doesn’t get back to you within eight weeks, or if its reply isn’t satisfactory, you can contact the Financial Ombudsman Service, which settles disputes between consumers and financial companies, to ask if it will investigate your complaint.
Even if you weren’t mis-sold a packaged account, you can change back to a standard account with no monthly fee, or switch your packaged bank account to one that suits you better. The Current Account Switch Service (CASS) makes the process of switching from one account to another quick and straightforward. You may also find a cashback deal when you switch to another provider.
If you need an overdraft as part of your switch, this must be agreed and in place with your new provider ahead of the switch.
Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more
Compare Current Accounts
What type of current account are you looking for?
- Earn up to 3% cashback every month on selected Household bills paid by Direct Debit, capped at £5 for each cashback tier each month
- Manage your account online or via mobile app
- Get access to a range of 123 offers
Eligibility / Restrictions
- To be eligible for cashback you must pay a minimum of £500 into your account each month; have 2 active Direct Debits and be over 18 years and live in the UK permanently
- There is a £2 monthly fee for maintaining the account that will automatically be taken from your account each month
- Log onto Online or Mobile Banking at least once every 3 months. You accept that this is a paper-free account, so documents, statements and some letters will be sent to your secure inbox in Online Banking
Please note: Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. You can use the options above the table to order it according to various criteria.
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