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With soaring household bills forcing many of us to reassess non-essential spending, does it really make sense to pay for a bank account with all the trimmings when you can get one for free?
Packaged accounts can be a convenient way to buy several types of insurance in one go. They typically come with travel insurance, breakdown cover and mobile or gadget insurance, in return for a fee.
But with some accounts costing as much as £390 a year, they only make sense if you actually use the benefits on offer.
Which? has scrutinised the small print of 12 packaged accounts to help you pick a winner – or ditch a dud.
As well as rating their individual insurance elements, we gave each packaged account an overall score to help you compare the best and worst.
Nationwide’s FlexPlus account has been our top pick for many years and achieved the highest account score (82%) once again in our latest analysis, offering comprehensive cover in all three core insurance elements. It also has the lowest fee (£13 a month).
The Everyday Extra account from The Co-operative Bank is a close second with a score of 79%. In terms of travel cover, The Co-operative Bank has the edge over Nationwide because there’s no excess to pay on claims.
However, it drops points elsewhere. For example, it’s more expensive (£14.50 a month versus £13 a month), and its breakdown cover comes with more restrictions (Nationwide’s AA cover imposes no limit on the number of call-outs while the limit is five/year for The Co-operative Bank’s RAC policy).
We gave our lowest score of 59% to the Reward Platinum account by NatWest and RBS, which is only open to existing customers. It's one of the more expensive accounts, at £20 a month, but achieved the lowest policy score for travel insurance.
Bear in mind that packaged accounts set upper age limits for their travel insurance, which range from 69 to 80. However, NatWest/RBS and Nationwide will theoretically offer cover whatever your age if you pay an additional fee when you reach 70. This is £75 per person at NatWest/RBS and £65 per account at Nationwide, meaning joint account holders only pay once. You’ll still need to disclose any medical conditions, which may or may not be covered.
If you’re struggling to get suitable cover from a packaged account, you might be better off with a standalone policy.
You can find a directory of travel insurance companies with a proven specialism in covering people with medical conditions – all of which are authorised and regulated by the Financial Conduct Authority (FCA) – at moneyhelper.org.uk.
Watch out too for high excesses (the amount you’re expected to contribute to claims) as well as limits on the number of devices covered or claims you can make.
Always check if there are other conditions to cover, for example, you might need to register your mobile phone online or hold the account for a certain period.
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Sign up nowIf you use at least two of the insurance benefits, a packaged account will often work out cheaper than standalone policies offering equivalent levels of cover.
Joint packaged accounts can be particularly cost-effective, as two people will be covered under one fee.
If you do decide a packaged account is right for you, it's important to keep a sharp eye on changes to the terms and conditions to ensure it continues to offer value for money.