Plenty of choice
Decide on the type of account you want, including those with arranged overdrafts, switching incentives and extra benefits
A packaged bank account is a type of current account that comes with extra features, such as travel insurance and breakdown cover or perks like airport lounge access. Most packaged accounts charge a monthly fee, so try to choose an account with benefits that will outweigh the cost.
Offer a wide range of benefits, such as insurance that you’d usually buy separately
Additional members-only offers, such as deals on credit cards and loans for account holders
It’s easy to calculate whether the account fee is justified
The fee might not be worth the benefits and the incentives might change over time
Insurance policies may have exclusions and limitations
May be more suitable alternatives if you need to use your overdraft often
Unless you’re going to use the benefits included in your packaged account, you could end up wasting money on the account’s monthly fee
Try to measure the monthly fee against the benefits you’ll receive. You may get more benefits for a slightly higher fee elsewhere, or you may pay too much for benefits you won’t use
Be sure the benefits of the packaged account suit your needs. For example, there may be an age limit to travel insurance or it might not cover a pre-existing medical condition
If you need an overdraft, you may want to look for an account with a cheaper borrowing rate instead of an account with benefits, as this will save you money in interest repayments
Packaged bank accounts offer perks such as travel and mobile phone insurance, airport lounge access and car breakdown cover. You’ll pay a fee for the package of benefits and, in general, the higher the fee the better the package. You’ll need to weigh up if the fee is worth it for what you get in return. If you are normally overdrawn, you might be better off with an account with the cheapest overdraft."
Different current accounts come with their own incentives and features, so what benefits are ‘best’ will depend on what features are most important to you. For example, you may be after travel insurance with your current account or you may prefer to receive cashback on your spending.
You might be able to get a packaged account with bad credit, but it will depend on the view of the account provider. They will want to be confident that you can afford the monthly fee and may also limit the amount you can borrow through an overdraft.
Fees for a packaged account will vary from provider to provider, with the monthly fee displayed upfront so it is easy to compare. Factor in the benefits you’ll receive alongside the fee before making your decision.
How fixed the benefits are on a packaged bank account will depend on the individual account, so check the terms and conditions closely. Features may also change over time if you retain the account for more than 12 months, but again it will depend on the account provider.
Travel insurance is one of the most common additional benefits of a packaged account, with many accounts offering this type of cover. Make sure the travel insurance is right for your needs, including the geographical regions it covers, any policy extras such as extreme sports cover you need, and whether you have the option to cover pre-existing medical conditions.
Switching from a regular bank account to a packaged account works in the same way as any other current account switch. You should also be able to use the current account switch guarantee to make it hassle-free.
This will depend on the terms and conditions of the account provider. You might find that you will face an additional charge for holding the current account, or that its connected benefits are cancelled. If you’re struggling with the funds to pay the monthly fee, contact your account provider as soon as possible to try and work out a solution.
A packaged account could be right for you if the benefits you receive from the account outweigh what you pay in fees. Take time to look at the individual benefits and work out how much they might cost if you bought them separately. That way you can see how much value they have when compared to the fixed monthly fee.
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A current account is a bank or building society account that lets you manage your day-to-day spending.
You can have your salary paid into it, set up direct debits and standing orders, and negotiate an overdraft. Some accounts also pay interest on balances and offer cashback on spending.
There are lots of types of current account to suit all sorts of personal situations. These include:
Standard: For managing ordinary income and expenditure, usually with a debit card, a cheque book and an overdraft
Packaged: These come with various bonuses, including things like interest-free overdraft, insurance add-ons and discounts for other banking products. They usually have monthly fees and eligibility requirements
Rewards: These can offer a range of benefits from cashback and discounts when you spend, to loyalty points and even boosted interest on your in-credit balance.
Student/graduate: Current accounts designed to cover the particular financial pressures faced by students and recent graduates, normally including larger interest-free overdrafts
Joint: Accounts designed for two or more people, to cover household expenses or couples’ expenditure
Children’s: These have few features and are designed to introduce children to banking and saving
Some current accounts come with extra benefits for the account holder, like a cash bonus for signing up, better interest rates or even breakdown cover. The accounts might only be available to certain customers, like those with high credit ratings.
Some current accounts include fees if you use them in a certain way – some banks might charge you for resending a printed account statement or for accessing your account abroad. You may even be charged a fee for going into your overdraft without telling your bank beforehand.
The traditional idea of banking is being changed by digital or challenger banks, who provide most of their services through the internet or a mobile app rather than in branch or over the phone. Many are designed to be more open and transparent with customers and less focused on banking products.
It’s more attractive than ever to compare current accounts: healthy competition means there are a number of incentives available for those willing to switch. But if you don’t compare current accounts, you could be missing out on a great deal – and some free cash!
Switching current accounts is simple because most of the legwork is done for you and, at the end of it, you can benefit from an account that’s much better for your pocket and lifestyle.
If you’re looking for the best current account, you’ll benefit from a wide range of products to choose from. Many of the best current accounts offer:
High interest rates
Cashback and rewards on spending
Competitive overdraft rates
The best current account is different for each person, as it depends on your spending habits and level of savings.
Switching current accounts has never been simpler, and many providers offer lucrative incentives for moving your account to them.
The Current Account Switch Guarantee makes switching current accounts very easy indeed, and your bank will do most of the legwork for you, including transferring money, direct debits and standing orders, and informing your employer.
When you switch your current account to a new bank or building society, you could get £100 or more in cashback as a reward for switching. Just make sure that you’re applying for an account that suits your needs, not just the one with the highest cashback.
If you tend to stay in credit and never go overdrawn, you could get rewarded regularly by your bank or building society. By switching to a rewards current account, you could get a monthly reward payment and earn cashback on your spending. Some providers will also offer a cash incentive for switching your current account to them.
Many rewards accounts have requirements such as paying in a minimum amount each month, or having a minimum number of direct debits, so make sure you can meet the criteria to get the rewards.
If you’re fed up with getting poor customer service from your bank, switch your current account to a provider that’s known for looking after its customers.
As well as making your life easier, some of these accounts offer extra benefits such as competitive overdrafts or cashback for switching.