Packaged accounts

When applying for a current account, your bank might offer you an upgrade to a 'Premier', 'Plus' or 'Gold' account or something similar. These are known as packaged accounts and you usually have to pay for them.

This kind of account might be right for you but it's always worth staying MoneyFit and making sure you know exactly what is on offer and how much it will cost you before committing to anything.

Before you decide

For a monthly fee, packaged accounts offer you benefits like travel insurance, preferential rate overdrafts and more. But these extras aren’t always worth the fee. Here’s what you need to know before you decide.

What are packaged accounts?

Packaged accounts offer a range of extras in exchange for a monthly fee.

Money fitness tip

Don't be tempted by the 'freebies' - you're paying for them. And if you don't need them that's your money wasted!

The benefits vary by account, but you can often get:

What to watch out for

  • The cost of the account may be higher than the cost of buying the benefits separately.
  • The insurance you get may be pretty basic – it might not give you the level of cover you need. Travel and life insurance may have age limits or exclusions that make them unsuitable for you.
  • You may not need all the benefits attached to the account.
  • With some banks or building societies, you have to activate each of the services before you can use them. Check whether you need to do this when you open the account, otherwise you may find that your insurance is invalid and that you’ve been paying for something you can’t use.

Should you choose a packaged account?

Packaged accounts can be a good deal for some, but they are not for everyone.  If you’re thinking of getting one, ask yourself:

Money fitness tip

Check the AER, which allows you to compare the in-credit interest  that the account will earn over the year.

  • How many of the extras do I really need?
  • Do I already have cover through another product? For example, do you have cover through your home insurance policy?
  • Does the insurance give me the right amount of cover?
  • Could I get the services separately for less?
  • If the account gives me an interest-free overdraft, am I currently paying overdraft fees and charges higher than the cost of the packaged account?

If you're thinking about switching to a packaged account just because you need an overdraft,  first ask your bank if they can add one to your existing current account. If you don't use it often, sticking with a free current account is probably the cheaper option. 

Shop around and compare packaged accounts with other accounts

Comparison websites are a good starting point for anyone trying to find a current account tailored to their needs.

We recommend the following websites for comparing current accounts:

Remember:

  • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
  • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.

If your bank or building society moves you to a packaged account

Your bank or building society shouldn't move you from a free account to a packaged account without your permission.

If your bank does move your account without your permission, or if you feel you’ve been mis-sold, find out how to make a complaint on  the Financial Ombudsman Service's website.

Use Which's template letter for mis-sold packaged accounts.

Last reviewed: 13/06/2017

This content has been provided by the Money Advice Service