Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes
Premium bank accounts
While sticking with the same basic current account you’ve had for years is easy, did you know that by paying a little bit each month you could enjoy a bank account with a wealth of extra benefits?
We’ll go over the sorts of benefits you could expect from a premium or packaged bank account and help you work out whether or not you think they’re worth the money.
In This Guide:
- What are premium bank accounts?
- Are premium bank accounts worth it?
- Are there any free bank accounts that offer similar benefits?
What are premium bank accounts?
Premium or packaged bank accounts come with a monthly fee and in return, offer various different perks and benefits to the account holders.
This monthly fee is generally around £15 but can be anywhere between £5 and £25. The amount you pay varies depending on the bank in question and on what kinds of perks are on offer.
There are a wide range of different benefits offered with premium bank accounts from free breakdown cover to cash-back on purchases.
Are premium bank accounts worth it?
Whether or not premium bank accounts are worth the monthly charge is a hard question to answer outright. It will depend on the account in question, how much is charged, and how much you value the benefits that it comes packaged with.
One thing you could consider, if you want to check whether or not you’d be getting good value for money, is the average retail value of the perks offered.
If you’d end up paying less per month for your bank account than you otherwise would for the benefits that it comes with, then that account is probably worth the money.
Of course, it all also depends on whether or not you’d actually want or need the associated benefits in the first place. Don’t let yourself get pressured into paying for a premium bank account that comes with a host of random extras that you’d never actually take advantage of.
The same applies if, say, a bank account comes packaged with breakdown cover that you do need but also various other things that you don’t. You could be getting a good deal on the breakdown cover that would then be outweighed by what you’re paying for any extras that you don’t use.
For example, Natwest and RBS both offer accounts known as Select Silver premium current accounts that offer quite a wide range of extras including European travel insurance, mobile phone insurance and a subscription to LOVEFiLM for a fee of £10 per month.
All of these things together would cost a lot more than £10 per month but if, say, you are an avid film fan but you don’t plan on going on holiday any time soon, then you could be better off just purchasing the LOVEFiLM subscription and mobile insurance separately.
Compare premium or packaged accounts online and you’ll be able to weigh up the various benefits on offer with each account.
Are there any free bank accounts that offer similar benefits?
Thanks to the competitive nature of the banking industry in the UK, there are a number of different free current accounts on offer that come with certain benefits and added extras.
The 7 day switching rule, designed to make it easier for customers to switch between bank accounts, means that banks are under increasing pressure to make their free accounts more attractive.
Some current accounts will offer particularly high interest rates and will require you to deposit a certain amount each month, but won’t charge you anything extra.
Again, compare the various free current accounts on offer using our free online comparison service to see what kind of benefits you could enjoy when you bank.