Are packaged bank accounts worth considering?

Most banks offer a number of paid for bank accounts, which charge you a monthly fee in return for a number of additional products and benefits. Typically, on top of all your regular banking services, you'll also be offered travel insurance, breakdown cover, and maybe also mobile phone insurance - in addition to some other bells and whistles.

These accounts are often referred to in the industry as "packaged bank accounts" and they can be worth considering. But before you sign up, take a run through our checklist, to see make sure the one you choose is right for you.

  1. 1

    Do I need the extras on offer?

    It's common for banks to overstate the value of the different elements of their packaged bank accounts. For example, you might be told that the travel insurance is worth up to £100 - but the policy on offer may only be worth anything near £100 for people in their late 60s. For everyone else, it might be worth more like £30.

    For packaged accounts to be good value, you generally need to be sure that you'll make use of several elements of the package - for example, the travel insurance and the breakdown cover. If you're just signing up for one element of the package, you may find you can get it cheaper elsewhere.

  2. 2

    Is the insurance cover right for me?

    Although the insurance policies that come with packaged bank accounts are often quite good quality, they may not be exactly what you're after. Some banks, for example, will only offer European travel insurance, but don't offer any option to upgrade to worldwide.

    If you regularly travel to the US, European travel insurance is no good - so you'll need to splash out for a separate policy anyway. So your packaged bank account saves you nothing.

    It's a similar story when it comes to breakdown cover. Does it include home start, or European cover? Make sure you're clear on all this before you sign up.

    And take a look at cover levels and excesses too. Some mobile phone insurance policies have tiny cover limits which won't pay out enough to replace an expensive smartphone.

  3. 3

    Check the charges

    Although a packaged bank account can save you money, make sure you're clear on all the fees and charges associated with the account before you sign up. If you occasionally dip into your overdraft, some banks can be much more expensive than others.

    Equally, charges for using your card overseas can also vary considerably. These are unlikely to be flagged to you clearly while you're taking out the account - so make sure you do your own homework.

  4. 4

    Is your bank nice to its customers?

    Getting a good deal is important when it comes to choosing a packaged bank account. But it's also worth looking for a bank that will treat you well after it has got you to sign on the dotted line.

    Fairer Finance rates banks based on how happy their customers are, how good they are at dealing with complaints and how transparent they are.

    Banks that receive a Fairer Finance Gold, Silver or Bronze ribbon are much more likely to treat you well than the banks who appear at the bottom of our tables. Take a look at the best performing banks and building societies before you start your search for a new account.

  5. 5

    Take advantage of the switching guarantee

    Once you've found an account that's right for you, simply fill out the application form and let your new bank do all the rest. Under the industry's new switching guarantee, banks promise to switch you from your old to your new account in seven working days or less.

    And if any payments go astray, or you incur any cost as a result of the switch your new bank will promise to reimburse you. You also have the security of knowing that for 36 months from the switching date, payments accidentally made to your old account will be re-routed to your new account.

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