Packaged current accounts

Packaged bank accounts are current accounts that come with an assortment of different features. Unlike regular current accounts, they are not free, but they are likely to market the features they come with, in exchange for a monthly fee, as ‘free’!

The average monthly cost for a packaged account is normally somewhere between £10 and £25, and they tend to come with at least some of the following features:

  • annual travel insurance
  • car breakdown cover
  • discounts on package holidays
  • card protection
  • mobile phone insurance

Is it worth it?

Packaged current accounts have a bit of a reputation as a rip-off, mainly because a lot of people sign up but then don’t -- or can’t -- take advantage of the account’s features. A lot of these features come with very complicated small print that limits the value they offer. If you are thinking about switching to a fee-paying account, take the time to pore over the small print for absolutely everything, and also to compare prices elsewhere. It is unlikely your bank will offer the cheapest mobile phone insurance… so check carefully before you commit to buying it through them.

One to avoid: card protection schemes

Many packaged current accounts come with a card protection scheme that offers less protection than you might like. It might, for example, promise to cover you against any fraudulent transactions made using your cards… but given that the Banking Code already covers you against this (with a maximum liability of £50), why pay for an account that gives you free something you already have?

Our final word on subject is to treat packaged bank accounts with caution. Before you pay for a bank account, be as certain as possible that you will use the ‘free’ features it comes with. Free accounts often offer better interest rates (if you are usually in credit) and lower overdraft charges (if you’re not), and those are the main things you should be looking for in a current account.

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Some important information about this page

† Denotes a tiered rate.

Current accounts data provided by Moneyfacts, an independent third party.

We are normally made aware of changes to rates and products, but very occasionally changes may occur without our being notified. If you spot any mistakes or inaccuracies on our site, please contact us.

Please note that the services and products featured are those made available from advertisers and may not necessarily be the best offers on the market. For more information, please see our Current accounts advertising disclosure.

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