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Best packaged bank accounts

Find out which packaged accounts offer the best value based on cost and the quality of the insurance and other benefits on offer.

In this article
Best and worst packaged bank accounts  Is it worth paying for a packaged account? Should I open a joint packaged account? Nationwide FlexPlus in detail
Packaged account mis-selling  Can I reclaim packaged bank account fees?

Best and worst packaged bank accounts 

Some current accounts come with extra benefits, such as travel insurance, car breakdown cover and mobile phone insurance, at a monthly fee. 

If you don't want to pay a monthly fee on a bank account and you stay in credit each month, we review the best credit interest current accounts on the market, which currently beat the rates offered by many savings accounts.

BEST AND WORST PACKAGED BANK ACCOUNTS
Provider Annual cost Travel insurance Upper age for travel insurance Car breakdown cover Value of key benefits Interest-free overdraft Mobile phone cover limit Account score
Nationwide Flexplus £156 WF* 74 R, H, N, A, EU £346 £250 £1,000 80%
3% interest paid on credit balances up to £2,500.
Barclays Travel Pack £126 WF* 79 R, H, N, A, EU £266 £200 No cover 69%
The Co-operative Bank Everyday Extra £180 WF* 79 R, H, N, EU £346 £0 £1,000 67%
Minimum monthly funding of £800 required.
RBS Select Platinum £204 WF* 69 R, H, N, A £259 £250 RP 67%
Also pays 2% cashback on household bills paid by direct debit (utilities, council tax, TV packages,  mobile and broadband).
Halifax Ultimate Rewards £144  WF* 70 R, H £227 £300 £2,000 66%
Annual cost of account increases to £168 from 1 July 2018. Minimum monthly funding of £750 required.
NatWest Reward Platinum £228 WF* 69 R, H, N, A £259 £250 RP 65%
Also pays 2% cashback on household bills paid by direct debit (utilities, council tax, TV packages,  mobile and broadband).
Lloyds Bank, TSB, Bank of Scotland Platinum £204 WF* 79 R, H, N £233 £300 £2,000 63%
Halifax Ultimate Rewards £180 WF* 70 R, H £227 £300 £2,000 62%
First Direct First Directory £180 WF* 69 R, H, N £233 £250 (see notes) £1,000 59%
Minimum monthly funding of £1,000 required. First Direct offers a £250 interest-free overdraft on its standard account, so we've not awarded additional points for this in our analysis.
TSB Silver £119 EC 64 R £158 £50 £2,000 55%
Clydesdale/Yorkshire Bank Signature £162 WF* 74 R, H £227 £0 £1,000 55%
RBS Select Silver £120 ES 69 No cover £102 £10 RP 42%
Also pays 2% cashback on household bills paid by direct debit (utilities, council tax, TV packages,  mobile and broadband).
NatWest Reward Silver £144 ES 69 No cover £105 £10 RP 38%
Also pays 2% cashback on household bills paid by direct debit (utilities, council tax, TV packages,  mobile and broadband).
Table notes and key (analysis correct at November 2017):

Value of key benefits: the combined cost of a Best Rate travel insurance policy, breakdown cover from WRP LV and mobile phone insurance policy from Insure2Go (see below for further details)

Key: Travel insurance - EC = Europe annual inc UK (couple), ES = Europe inc. UK (individual), WF = Worldwide annual inc USA (family), WF* = Worldwide annual inc USA (family) + winter sports

Key: Car breakdown cover - R = Roadside assistance, H = Home start, N = Nationwide recovery, A = Alternative travel or accommodation, EU = European assistance

Key: Mobile phone cover - RP = Replacement phone

How we calculated our account score

We 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. All accounts are available to new customers.

Here is the account score weighting:  Travel insurance 30% / Car-breakdown cover 30% / Annual cost 20% / Mobile-phone insurance 10% / Interest-free overdraft 10%

Value of key benefits

As travel insurance, car breakdown cover and mobile phone insurance are three benefits Which? members are most likely to use, we've 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), so you can compare their value.

Is it worth paying for a packaged account?

Which? has been analysing the value of fee-charging bank accounts for many years and we always find the same thing – that you can often get the extra benefits they offer cheaper elsewhere.

And some of the 'benefits' just aren't that much use. So if you are thinking of opening a fee-charging bank account, or already have one, ask yourself these key questions:

  • How many of the benefits do I really need?
  • Does the insurance give me the right amount of cover?
  • Can I get any of the benefits cheaper elsewhere?
  • If the account offers an interest-free overdraft, am I currently paying overdraft fees and charges that are higher than the cost of the fee-charging bank account?

If you do have a packaged account, you should be given ample notice of any changes, as well as an annual eligibility statement prompting you to assess whether the account is still worth paying for.

Take the time to see what else is on the market,making sure that you don’t haveduplicate cover elsewhere – mobile phone cover included in your home insurance, for example. Switch if it no longer suits you. 

Action point: Best bank accounts for overdrafts – if you're looking to switch accounts for a cheaper overdraft. 

Should I open a joint packaged account?

Sharing a packaged account with someone you live with is a good way of getting more value from the account as you’ll both be covered, but will pay just the same monthly fee between you.

Not all packaged accounts offer value for money. But our analysis of the insurance policies offered by these accounts places Nationwide Flexplus (£13 a month) at the top, with a score of 80%.

This account has the added sweetener of 3% interest on balances up to £2,500. And, FlexPlus customers can apply for a Flex Regular Online Saver paying 5% on up to £250 a month for one year. 

Here’s a summary of the benefits on offer:

Nationwide FlexPlus in detail

In our analysis, Nationwide's packaged account benefits are worth an impressive £346, matched only by Co-operative Bank Everyday Extra, which costs an extra £24 per year. We awarded full marks for Nationwide's car breakdown cover. 

Car breakdown cover: Britannia Rescue UK and European personal breakdown cover for all account holders. No call-out limit.

Travel insurance: Worldwide cover for all account holders, their partners and any dependent children. At 75 an age extension fee of £50 applies per account. Excess £50 for some claims.

Mobile phone or gadget cover: Worldwide cover up to £1,000 for any mobile phones owned by account holders, their partners and dependent children. Excess from £25 to £50 per claim (up to £100 for Apple devices). Max four claims per year.

Action point: How to find the best joint bank account - how to make the most of a shared account and avoid common pitfalls.

Packaged account mis-selling 

There are rules in place to prevent insurance mis-selling within fee-charging bank accounts.

These force providers to a) check whether you are eligible to claim under each policy and make sure you know that information; b) establish whether each policy is suitable for you and alert you if some aren't; and c) provide you with annual eligibility statements prompting you to check if the policies still fit your needs.

Here are some other things to watch out for:

  • You were signed up without realising it  Banks should not do this without your consent unless all customers on a previously free account are being switched to a packaged account. 
  • You are no longer eligible to claim If your circumstances change, for example, if you pass the maximum age limit to claim on a travel insurance policy, your provider should inform you of this. 
  • You have to activate the benefits before you can use them Check whether you need to do this when you open the account, otherwise you might find that your insurance is invalid and that you have been paying for something you can't use. If this wasn't explained to you and your insurance claim is rejected, you might have grounds for complaint.

Can I reclaim packaged bank account fees?

If you think the features of the packaged account weren't explained properly, or the benefits didn't apply to your circumstances, you might have been mis-sold the account.

First, lodge a complaint with your bank or building society. If after making a formal complaint, you disagree with their final decision, or if you don’t hear from them within eight weeks, you have the right to take your complaint to the Financial Ombudsman Service (FOS)