Packaged Bank Accounts

Packaged Bank Accounts

Most high street banks and building societies have been pushing ‘Packaged Bank Accounts’ on to their customers since the 1990s. Many of those accounts no longer exist but some are still available today.

What is a Packaged Bank Account?

These accounts are essentially current accounts with extra benefits and features. The account name may include the word ‘premium’, ‘gold’, ‘reward’ or ‘advantage’ to give it a superior feel compared to the standard current account.

The main benefits and features provided with these accounts include preferential rate overdrafts and loans, travel insurance, mobile phone insurance and breakdown cover. In addition to these there may be other promotions and discounts available.

However, all this comes with a price tag, usually between £5 – £25 per month.

Do you need the extra cover?

Packaged bank accounts can offer value for money if you will be using much of what’s being offered, such as the travel insurance and the breakdown cover. If you are likely to use just one element of the benefits, you will probably get cheaper deals elsewhere.

Some of the benefits may not apply to you for example, breakdown cover when you don’t own a car, or if you already have separate cover.

Does the insurance provide adequate cover?

The policies are often reasonable in what they cover, but do they meet your specific needs? For example, the travel insurance may just cover you for European travel only. This is useless if you regularly travel to the USA as you will need separate cover.

If you like winter sports and snowboarding, check beforehand to see if the insurance covers this, chances are you may not be covered.

Other typical exclusions are for people over a certain age. If this is you, make sure you are covered when signing up.

Similarly, with breakdown cover, will it cover home start or European cover?

Will the mobile phone insurance pay out for the cost of replacing your smartphone?

Check the levels of cover and what excesses are on the policies. These things need to be clarified before you sign up.

Charges and fees

In addition to the monthly fee, be sure you understand what other fees and charges come with the account before committing to it. For example, the occasional use of your overdraft facility may cost more than a rival banks charges. Also check what the charges are for using your credit card abroad as these will vary from bank to bank. This won’t be highlighted to you so make sure you find out beforehand.


Businesses that provide packaged bank accounts must be regulated by the Financial Conduct Authority (FCA) to sell and underwrite the insurance.

Banking regulation came into force in April 1988. Sales made after this date must be addressed by the business that sold you the policy, regardless if it is trading or not. They must adhere to the regulations stipulated by the FCA and inform you of your statutory right to raise a complaint with the Financial Ombudsman Service (FOS) if you are not happy with their response.

Related Posts