The “best” bank accounts differ for one consumer to the next, so what is best for you may not be best for someone else. Packaged bank accounts give you extra benefits in return for a monthly fee. Those benefits typically include things like travel insurance, breakdown cover, authorised overdraft, mobile phone insurance, and the accumulation of air miles. Packaged accounts usually cost £12 to £25 per month, or £144 to £300 per year.
You have to ask yourself if you need the perks that are included with packaged bank accounts, and if so, if you could get them cheaper elsewhere. For example, if all you need is simple breakdown and roadside assistance cover, you can get a basic policy from AA for around £28 per year, so there wouldn’t be much sense in paying £300 per year for a packaged account. Also, you do not necessarily have to have a packaged bank account to get an arranged overdraft, so be sure to ask at banks you’re considering.
The fact is, you’ll have a hard time beating inflation with your savings rate whether you go with a packaged savings account or not. As of mid-February 2011, the top instant access account is the Post Office Online Savings account, which pays 2.9% AER for 12 months and offers unlimited withdrawals.
