Packaged bank accounts
What is a packaged bank account?
Packaged bank accounts offer extra benefits or rewards to their customers, usually to attract new customers or encourage loyalty from existing customers. The extra benefits can be anything from travel or tech insurance to breakdown cover or a better deal on your overdraft.
How much does a packaged bank account cost?
Packaged accounts can typically cost anything from £2 to £25 per month (sometimes even more at the higher end of the market). With so many offers available it’s vital you make sure you pick an account with extras you’ll actually use. Otherwise you’re just throwing money away.
If your bank attempts to withdraw your fee and you have a zero or negative balance, they are still authorised to charge you and this will land you in your overdraft. This could mean you will end up with expensive fees so make sure you include this extra cost in your monthly budget.
Is it worth paying the monthly fee?
At face value, you might already be sold on the benefits of a packaged bank account but you need to make sure it’s worth the fee.
Calculate how much it would cost you for the benefits, say it’s personal tech insurance, how much does this cost on its own? If you think you can save, then opt for a different bank account instead, with a smaller or no monthly fee.
Can I get a joint packaged bank account?
Quick answer? Yes! If you and a partner or housemate are looking to share an account to make things easier, then a packaged account could be your best option!
You would be able to split the monthly fee and both of you would benefit from the rewards on offer. But remember, make sure it’s worth forking out for, even if you both use the benefits, it could still be cheaper elsewhere.
Can I get a packaged bank account with bad credit?
Generally, you will be credit checked if you’re applying for a packaged bank account because there is a monthly fee and usually an overdraft facility. So the worse your credit history is, the less likely you are to be accepted for a packaged bank account.
If you’re new to the country or have very limited credit history a basic bank account is a good place to start.
Final Word
A packaged bank account could be the right place to keep your money, as long as you know you can afford the monthly repayments and make them on time. Be sure to check your options before applying and double check the terms of use for the reward products and whether you’re actually getting a good deal.
