The best UK packaged bank accounts

As Nationwide scraps the fee-free overdraft and 3% in-credit interest on its FlexPlus account, we look at whether there are any accounts out there that really offer value for money.

Packaged current accounts have – rightly – been slated by personal finance sites like ourselves in the past.

There was the massive mis-selling scandal for a start (more on that later), not to mention the hefty monthly fees.

Then there's the fact that the perks on offer have been scaled back of late.

Yet despite all these negative headlines, packaged current accounts can still prove a savvy option, as our own editor-in-chief found out.

You just need to make sure you are making use of as many perks as possible to justify the costs.

So, is a packaged account right for you? Read on, do the sums and don’t forget the small print.

Packaged accounts explained

Before deciding whether you want one, let's look at exactly how a packaged account works.

Essentially, it's a current account with bolt-ons like insurance and more generous in-credit or borrowing rates.

They come with a monthly fee, so you need to check whether the perks on offer outweigh this cost as you can get many of the same benefits with fee-free accounts (we’ve noted these below).

It’s also vital you read the small print before you sign up as there are a load of exclusions that can catch you out, such as age limits on insurance.

Finally, check that you’re not doubling up with another policy you've already bought elsewhere or receive through your company.

We’d recommend checking the price of insurance now to see if you’d be better off getting a free bank account and buying the insurance separately.

In most cases, we've listed the best free 'equivalent' for each account.

New packaged accounts

If you’re confident banking on your mobile, these relatively new banks could be worth considering.

Monzo Premium

Challenger bank Monzo has just launched its Premium Account, which will cost you £15 a month.

It comes with a host of features for that fairly hefty price tag, and not just the fact that you get a white, metal debit card.

For example, you get phone insurance cover for theft, loss, accidental damage and cracked scenes for phones worth up to £2,000 (with a £75 excess), and worldwide family travel insurance, underwritten by AXA.

It’s multi-trip cover too, so it’s useful if you plan on making a few trips overseas.

On top of the insurance, you’ll earn a rate of 1.50% AER on balances of up to £2,000 in your account balance and regular ‘pots’, though not in dedicated ‘savings pots’ within your account.

You’ll also be able to withdraw up to £600 cash abroad, without charge, every 30 days. That’s three times more than with the regular Monzo account, providing another perk for regular travellers.

It’s a step up from the Monzo Plus account, which comes with a £5 monthly fee. With that account, you’ll earn 1% on your account balances, and enjoy a £400 ATM withdrawal allowance overseas.

Both Plus and Premium account holders can take advantage of a host of deals with partner firms too, like Hello Fresh and Naked Wines.

Free equivalent: As well as the free account from Monzo, travellers should also take a look at Starling Bank, which has no fees or charges for spending overseas.

Revolut Metal

Beyond the attraction of a brushed steel card, this £12.99 per month current account from mobile-only provider Revolut has several benefits for travellers.

For example, you get up to £800 per month in free ATM withdrawals abroad, global travel insurance, overseas medical insurance and even free lounge passes if your flight is delayed by longer than an hour.

You also earn cashback when you spend with the card, at 1%  outside Europe and 0.1% inside the continent. You can even choose what currency you want that money to be paid in ‒ including cryptocurrencies. 

Account holders also enjoy ‘Perks Plus’, a series of discounts and cashback offers with partner firms.

Free equivalent: Again, Starling’s account sets the standard for traveller-friendly accounts, while Monzo’s free account is a contender. Revolut’s free Standard Account is also worth considering.

The best fee-free credit cards to use abroad

Best traditional packaged accounts

If you’d rather go with a more familiar name, then these are some of the top accounts worth a look:

Nationwide FlexPlus

The FlexPlus will set you back £13 a month, but it’s another one that will appeal to those who like spending time outside of the UK.

Account holders enjoy both worldwide family travel insurance and worldwide family mobile phone insurance, as well as no transaction fees when you spend or make withdrawals overseas.

In addition, you get UK and European breakdown and recovery assistance, with unlimited call outs for you or the person driving your car.

Free equivalent: If you’re a frequent traveller and want a free account, then Starling and Monzo remain the eye-catching choices.

And if you want a return on your balance then you could do worse than check out Nationwide’s own FlexDirect, which pays 2% on balances of up to £1,500 for the first year, so long as you pay in £1,000 each month. 

Halifax Ultimate Reward Account

The Ultimate Reward Account from Halifax isn’t cheap, costing £17 per month, though you get a fair bit back.

For example, every calendar month you’ll either get £5 cashback or one of a range of ‘lifestyle benefits’ ‒ such as a Vue cinema ticket, digital magazines or online film rentals ‒ so long as you meet certain conditions, like paying in £1,500 a month, keeping in credit and either spending £500 on your debit card or maintaining a balance above £5,000 for the full month.

On top of that, account holders will benefit from worldwide multi-trip family travel insurance, underwritten by Axa, which includes things like winter sports and golf trips.

There is also AA breakdown cover, which includes Home Start, and home emergency cover for up to £250 should you find yourself in a bind, to help you make your home safe and secure and get the energy or water back on after a failure.

Finally, there’s mobile phone insurance, which provides cover for the repair or replacement of your phone, worth up to £2,000, should it break down, get damaged or be stolen.

It covers one phone for a single account holder, or two for joint accounts.

Free equivalent: You can get that same cashback or monthly reward with the standard Halifax Reward Account, which is fee-free so long as you pay in £1,500 each month and stay in credit. 

Co-op Everyday Extra Account

The Everyday Extra account is another that includes worldwide travel insurance, underwritten by AXA.

It provides cover for the entire family, including dependent children up to the age of 22, with no excess payable on claims.

Alongside the travel insurance, account holders benefit from breakdown cover for both the UK and Europe provided by the RAC.

There is also mobile phone insurance, covering account holders for loss, theft, accidental damage and electrical or mechanical breakdown, anywhere in the world.

You can also opt into the bank’s Everyday Rewards scheme with the account, which pays you up to £5 per month, so long as you pay in £800 each month and make a certain number of debit card payments.

The account costs £15 a month.

Free equivalent: The Everyday Rewards scheme is also available on the Co-op’s main current account, which is absolutely free, providing you with the chance to earn £5 cashback. 

Club Lloyds Platinum 

For up to £22 a month (£19 if you pay in at least £1,500 a month), Club Lloyds Platinum offers worldwide travel insurance to account holders up to the age of 80 and covers you and your family for up to 45 consecutive days per trip.

Winter sports are covered for a maximum of 31 days in any calendar year.

Other extras with this account include AA breakdown cover and mobile phone insurance. 

Free equivalent: You can earn up to 15% cashback with Lloyds Classic Account.

Top bank accounts for switching services: get free cash, gadgets or holiday vouchers

Comparison of packaged accounts

This table is ranked by price, not quality – you should decide which features are most important to you:

Bank account

Monthly cost

Insurance

Perks

Other benefits

Monzo Plus

£5

None

No-fee ATM withdrawals up to £400 abroad per month

Interest of 1%

Revolut Premium

£6.99

Overseas medical, delayed baggage and delayed flight insurance

No-fee ATM withdrawals up to £400 per month.

LoungeKey pass access

Revolut Metal

£12.99

Overseas medical, delayed baggage and delayed flight insurance

No-fee ATM withdrawals up to £800 per month, ‘Perks Plus’ discounts with partner retailers

Cashback of up to 1% on spending

Nationwide FlexPlus

£13

Family travel, family mobile, UK & European breakdown cover

Fee-free foreign withdrawals

 

Monzo Premium Account

£15

Worldwide travel insurance, mobile phone insurance

No-fee ATM withdrawals up to £600 abroad per month

Interest of up to 1.5%

Co-op Everyday Extra

£15

Family travel, mobile, UK & European breakdown cover

Up to £5 per month in rewards

 

Halifax Ultimate Reward

£17

Family travel, mobile, breakdown cover, home emergency cover

£5 per month or one of a host of ‘lifestyle benefits’

 

Club Lloyds Platinum

£22.00

Worldwide family travel insurance, breakdown cover, mobile phone insurance

   
 

Mis-selling scandals

If you're offered a packaged account that doesn't fit your needs, be vigilant.

Part of the reason we’ve been so scathing in the past is that packaged bank accounts have been wrapped up in a number of mis-selling scandals.

Salespeople have been pressured into selling products which are unsuitable for customers, leaving them with an account that includes benefits they can't use.

In many cases, a 'free' standard account would have been much better for their needs.

If you’re mis-sold a packaged account

You’re not alone if you’ve been mis-sold a packaged account.

The first step is to establish whether or not you were actually mis-sold.

Look out for these signs:

  • You were signed up without being told;
  • You weren’t told you could have a free bank account;
  • You were told that having one would improve your credit score;
  • You were told you could get a market-leading deal on other financial products or services with this account but found you could actually get them cheaper as a new customer;
  • You needed the account to access a loan or mortgage;
  • Your bank knew you wouldn’t be eligible for one or more of the benefits; 
  • It failed to tell you that you’re no longer eligible for one of the benefits.

Try complaining to your provider first. Tell them how you’d like the problem to be resolved – perhaps you’d like your fees refunded or to be switched back to a standard current account.

Pop in-branch or ring up first but failing that you should write them a letter with bank statements detailing how much you’ve paid.

However, if you don’t get anywhere then it’s time to get in touch with the Financial Ombudsman Service. 

You can read about how to complain in more detail here: How to claim compensation for mis-sold packaged bank accounts.

Packaged accounts not for you? Compare standard and basic current accounts with loveMONEY instead.

 

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