What are premium bank accounts?
Premium or packaged bank accounts come with a monthly fee in exchange for various perks and benefits for the account holder.
The monthly fee is typically around £15, but it can range from £5 to £25. The amount you pay depends on the bank and the perks offered.
Premium bank accounts offer a wide range of benefits, from free breakdown cover to cashback on purchases.
Are premium bank accounts worth it?
Whether premium bank accounts are worth the monthly charge is not easy to answer. It depends on the account, the monthly fee, and how much you value the benefits included.
One way to check if you're getting good value for money is by comparing the average retail value of the perks offered.
If you end up paying less per month for your bank account than you would for the benefits included, the account is probably worth the money.
Of course, it also depends on whether you actually want or need the associated benefits. Don't let yourself be pressured into paying for a premium bank account with a host of random extras you'll never use.
The same applies if, for example, a bank account comes with breakdown cover you need, but also includes various other things you don't. You might get a good deal on the breakdown cover, but it could be outweighed by what you're paying for the extras you don't use.
For example, NatWest and RBS both offer Select Silver premium current accounts with a wide range of extras, including European travel insurance, mobile phone insurance, and a subscription to LOVEFiLM, for a fee of £10 per month.
Together, these benefits would cost more than £10 per month. However, if you're an avid film fan but don't plan on going on holiday anytime soon, you might be better off purchasing the LOVEFiLM subscription and mobile insurance separately.
Compare premium or packaged accounts online to weigh up the benefits each one offers.
Are there any free bank accounts that offer similar benefits?
Thanks to the competitive nature of the UK banking industry, there are several free current accounts that offer certain benefits and extras.
The 7-day switching rule, designed to make it easier for customers to switch bank accounts, means banks are under increasing pressure to make their free accounts more attractive.
Some current accounts offer particularly high interest rates and require a minimum monthly deposit, but won't charge any extra fees.
Again, use our free online comparison service to compare the various free current accounts available and see what benefits you could enjoy when you bank.