From mobile phone insurance to car breakdown cover, some current accounts offer a dazzling array of perks – but not all are worth their monthly fee. New research by Which? has identified the best-value packaged bank accounts currently on offer – and those that fail to measure up.
Some banks and building societies offer current accounts with a range of extra benefits for a monthly account fee – known as ‘packaged accounts’. These benefits vary, often including travel insurance, car breakdown cover, mobile phone insurance or interest-free overdrafts.
Banks claim these accounts help customers save on expenses, but not all packaged accounts are equally good value. Which? has identified the best – and the poorest-value – of those currently available.
Find out more: Best and worst packaged accounts
Best packaged accounts
Whether a packaged account is worthwhile for you will depend on which perks you’re most likely to use – keen travellers are more likely to benefit from worldwide travel insurance than those who prefer a holiday at home.
We compared accounts by looking at the products included and calculating how much it would cost to buy these benefits yourself – you can read more on our methodology below.
Our analysis found that Nationwide’s Flexplus account offers the best bang for your buck, with included perks valued at £346. At an annual account fee of £120, it was also among the cheaper products on offer.
With a broad-range of breakdown cover, a £100 overdraft and a £1,000 mobile phone insurance, users can take advantage of a number of benefits. Overall, our scoring system gave this product 83%, well above its nearest competitor.
Barclays’ Travel Plus Pack and Travel Pack accounts also scored well, with 68% and 67% respectively. While neither included mobile phone insurance, both offered a £200 overdraft.
The Travel Plus offered more extensive car breakdown cover, as well as more winter sports coverage in its travel insurance – but also came in at £60 more expensive annually than the Travel Pack account.
For more coverage of packaged accounts, visit our full analysis of the best packaged accounts.
Poorest-value packaged accounts
Some of the accounts we evaluated failed to deliver value for money – for two accounts, it would be cheaper to take out your own cover rather than paying the monthly account fee.
RBS/NatWest do have some good value accounts. RBS’ Select Platinum account scores 67% in our analysis, while NatWest’s Reward Platinum account scores 65%
But RBS’ Select Silver will cost you £120 a year in account fees, but potentially offers just £102 in value, while NatWest’s Reward Silver offers just £105 of value for £144 in annual fees.
How we evaluate packaged accounts
In our analysis, Which? looked at the cost of the packaged bank account, the quality of the travel insurance and car breakdown cover, whether the bank account comes with mobile phone insurance and the quality of the policy, and the level of overdraft you get without paying any interest.
We limited our investigation to accounts that are available to new customers.
For our final score, we put different weightings on each section, depending on how useful the product was likely to be: travel insurance 30%, car-breakdown cover 30%, annual cost 20%, mobile-phone insurance 10%, interest-free overdraft 10%.
To assess the value of the the key benefits, we included the cost of the cheapest equivalent Which? Best Rate travel insurance policy, car breakdown cover from Which? Recommended Provider LV and standalone mobile phone insurance from Insure2Go for an iPhone 7 (costing £80 a year).
Read more about our methodology on our full analysis of the best packaged accounts.
Should you get a packaged account?
If you’re likely to use the full benefits on offer, a packaged account may be a wise choice – but always do your research. In some cases, you may be able to buy the individual insurance covers at a cheaper rate than your monthly fees.
In addition, make sure you’re in a position to take advantage of the extras. Travel insurance, for example, often has an upper age limit for eligibility, so this benefit won’t be open to you if you’re over that age cut-off.
Keep in mind that you’re free to switch accounts if you not using your perks, or you can no longer afford the fees. At any time, you can ask your bank to move you to a free account, with the same account number.
Just make sure you’re not using any of the benefits at the time you make the change.
Find out more: I think I’ve been mis-sold my packaged account – what to do if you want to switch
Have you been mis-sold a packaged account?
When selling you a packaged account, your bank or building society needs to give you full and clear information so you can make an informed decision. Since 31 March 2013, this means they must:
- Check whether you are eligible to claim under the policies that are part of the package
- Tell you if a policy is not suitable for your circumstances
- Send you an annual eligibility statement explaining how you can claim on each benefit
There are other rules banks have to follow. They can’t:
- Sign you up without telling you
- Fail to offer you a free bank account instead
- Tell you a packaged account would improve your credit score
- Tell you a packaged account is necessary to access other products, like credit cards or mortgages
- Claim their offer has ‘unbeatable deals’ when you can get cheaper coverage as a new customer
If you believe you have been mis-sold your packaged account, you should approach your bank, both verbally and then in writing. You can use our free tool to generate a letter making a complaint.
If you’re not happy with your bank’s response, you can complain to the Financial Ombudsman Service.
Find out more: How to complain if you’ve been mis-sold a packaged bank account – the ins and outs of lodging a complaint