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Packaged bank accounts charge a monthly fee but include perks like travel, phone, and breakdown insuranceThey work best for people who travel, drive, or own expensive gadgets, saving hundreds if used correctlyAlways check the policy details, exclusions, and costs before signing up – not all accounts offer real valueJoint accounts can double the cover for the same fee, but only if you fully trust your partnerMartin Lewis’ team lists top accounts offering cashback, rewards, and comprehensive insurance for families and couples Packaged bank accounts divide opinion. For some, they’re a no-brainer, a convenient bundle of insurance and perks that can save hundreds of pounds a year. For others, they’re a needless expense that quietly drains their balance each month. Martin Lewis’ MoneySavingExpert (MSE) team calls them the “Marmite of banking”, and says that whether they’re worth the fee entirely depends on your personal situation. Here’s what you need to know before signing up, and which accounts currently offer the best value. What is a packaged bank account? A packaged bank account works just like a normal current account; you can receive your wages, pay bills and spend with a debit card, but you’ll also get extras such as insurance or cashback in exchange for a monthly fee. Typical perks include: Mobile phone insurance (often covering accidental damage, theft or loss) Worldwide travel insurance UK car breakdown cover Gadget insurance Other bonuses, such as cashback, interest-free overdrafts, or fee-free spending abroad Monthly charges range from around £10 to £30, depending on the provider and the quality of cover. Are they worth paying for? Packaged accounts work best for people who: Regularly travel abroadOwn a carHave expensive smartphones or gadgetsWant peace of mind from bundled protection But for those who rarely travel, don’t drive, or already have cheap standalone insurance, these accounts often cost more than they save. The MSE team’s golden rule is simple: only pay for what you’ll actually use. Start by multiplying the monthly fee by 12 to see what the account costs you each year. For example, a £15/month fee means £180 annually. Then, check if you could buy equivalent cover separately for less. If you can get travel, phone and breakdown insurance for under £180, you’re better off sticking with a free account and arranging the cover yourself. But if the bundled perks would otherwise cost more (or if you value the convenience of one monthly payment) a packaged account could make sense. MSE notes that the included insurance is often “high-end”, so even if it’s slightly pricier, the protection level may be stronger than standard standalone policies. How to get the most out of a packaged bank account Most packaged accounts cost the same whether they’re held by one person or two. That means you can double the cover for the same monthly fee by opening a joint account; a big win for couples who both travel or drive. But Lewis’ team adds a cautionary note: only open a joint account if you completely trust your partner. A shared account means linked credit files, and in some cases, financial control can be used abusively. Never feel pressured to open one. Are there any catches? Packaged accounts can be great value, but only if the insurance actually applies to you. The MSE team warns against assuming you’re covered for everything; always check for exclusions. Some travel insurance, for instance, excludes winter sports or has strict limits on age and medical conditions. Others may charge extra for family cover. You must also declare any pre-existing medical conditions to the insurer. If you don’t, your travel insurance could be invalidated. If your health changes after opening the account, contact the insurer again before travelling (cover is reassessed every year). The best packaged back accounts currently available Free for several months if you switch: Comprehensive cover, good for families & couples: Martin Lewis (and his Money Saving Expert team) is a trusted voice in personal finance for a reason. See his tips on switching bank accounts - and how it could net you £400 extra cash.
