Current accounts that come with extra features can offer convenience, but getting these benefits usually involves a monthly fee.
It is important to weigh up this fee with the benefits the account offers. We take a look at whether or not package current accounts can be a worthwhile choice or are simply a waste of money.
Why pick a packaged account?
Package current accounts can include a range of benefits like:
Preferential interest rates on exclusive savings accounts and ISAs
A personal account manager as your exclusive point of contact at the bank
Having these features included with your current account means they are all in one place, saving you the hassle of shopping for each one individually. This can offer convenience and sometimes value for money.
What is the catch?
Unlike regular current accounts, which are free to use, packaged accounts charge a monthly fee of up to £25 per month.
Make sure that the benefits are ones that you will use; otherwise, you will end up paying a monthly fee for something you do not need.
Choose the right packaged current account
A package account may be worth the money if it offers:
All the features you need for everyday banking
Additional features that you will actually use
An affordable monthly fee
Is the insurance good enough?
Although packaged accounts often come with travel or motor insurance, you need to make sure the cover offered is sufficient.
For example, if the travel insurance did not provide all the cover your holiday needed, you would have to buy more cover from elsewhere.
You should also check that the cover does not come with any exclusions that would make you unable to claim, as this could make the policy completely worthless to you.
Will it meet your everyday banking needs?
Your current account will need to offer you all of the banking features you need, as well as the perks.
Look out for any of the following you require:
An interest and fee-free overdraft with a sufficient limit
Whether you can transfer money
If the bank has any local branches
Whether internet and mobile banking are offered
If you are given a chequebook
If the account offers perks but not the basic features you need, it will probably not be worth the cost.
Some package accounts are only available to higher earners, meaning you have to be on a minimum salary or pay in a minimum amount each month.
Others are aimed at homeowners, car owners, or those over a certain age, so make sure you check that you will be accepted before you apply.
Is a packaged account worth it?
Look at the value of the benefits offered by a package account balanced against the monthly cost.
If the monthly fee is more than the extra features are worth, getting a package account is likely to be a waste of money for you.
The bank may give you an estimate of how much your packaged benefits are worth, but it is still worth shopping around to see how much you would have to pay for the services if you bought them separately.