Beginner's Guide To: Packaged current accounts

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The Independent Online

What are packaged current accounts?

They're bank accounts for which you pay a monthly fee. In return, you tend to get a range of additional benefits and services, such as travel insurance, and you're also occasionally given access to special offers that are not open to regular customers.

How much do they cost?

You'll pay £5 to £20 a month – depending on who you sign up with, and what benefits you choose. The Co-operative Bank offers two levels of packaged account. Its Privilege account is £8.50 a month and comes with travel insurance, a £250 interest-free overdraft and preferential savings rates – as well as access to one of three additional benefits. Its Privilege Premier account costs £12 a month and includes breakdown cover and a larger overdraft.

Are they good value for money?

It depends whether the benefits are things you'd buy anyway. Abbey's added-value account, for example, costs £15 a month and claims to offer annual savings of £830. Some £500 of these are hotel discounts – only a saving if you use them. Likewise, the £150 they claim to save on travel insurance is no use if you don't travel much. If you do, you could pick up a policy that suits your needs for £30. The Abbey and Co-op accounts both offer access to airport lounges, which is a nice perk – but may not be worth £15 a month.

What's the difference between a packaged bank account and private banking?

Private banking tends to be for the wealthy. At HSBC, you'll need more than £50,000 of savings with the bank – or a mortgage of at least £250,000, along with proof that you earn more than £75,000 a year – to qualify for its Premier banking services.

Where can I find more information about the best packaged accounts?

Go to www.moneysuper

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