Differences between basic and packaged bank accounts
So, you’ve hit peak adulting. It’s time to decide whether to stick with your basic bank account, or try one of those packaged ones your good-with-money mate swears by.
It’s a tricky decision, because paying for a bank account can feel a bit… wrong. Like upgrading to Spotify Premium when the free one does the job.
But packaged accounts come with perks that can end up saving you money in the long run. It’s all about finding one that fits your life and budget.
This guide breaks down what basic and packaged bank accounts are, how they work, and what you actually get.
What’s a basic bank account account?
A basic bank account works like any bank or current account. It’s where your salary goes in, your bills go out, and you manage your day-to-day spending. Not to be confused with a currant account*, which is where you might keep your raisins.
How do they work?
A basic bank account is usually free to use, while packaged ones have a monthly fee.
Basic bank accounts tend to cover the essentials without any frills.
Here’s what you'll typically get with most of them:
No sign up or monthly fees. It won’t cost you anything to keep the account open.
A debit card. For everyday spending for food, gigs, food at gigs…
An overdraft. Not every basic account offers one.
Interest on your balance. Not common, but worth checking.
Budgeting tools. Like spending insights. Increasingly available, but not everywhere
Mobile banking. Most accounts have an app these days
Fee-free spending abroad. Monzo offers this on all accounts, but it’s not standard with other banks. So if you’re planning a trip to Barcelona or a weekend in Berlin, it’s worth checking what your bank charges.
On top of no fees for spending abroad, our current accounts come with budgeting tools that help you see exactly where your money's going.
What are the benefits of packaged accounts?
Packaged bank accounts charge a monthly fee, but in return you get a bundle of extras that you might otherwise pay for separately. The idea is that if you use them, you can end up saving more by spending a bit.
Here’s what often comes with a packaged bank account:
Insurance bundles. This could include travel insurance, phone cover for accidental damage or breakdown cover if you drive.
Cashback on spending. A little money back on certain purchases. (We offer cashback with our free account by the way.)
Overdraft perks. Better rates or a larger buffer before charges kick in.
Fee-free spending abroad. Monzo includes this on basic accounts, but with many banks it’s a premium feature.
Lifestyle perks. Things like discounted gym memberships, restaurant offers, or streaming subscriptions.
Better savings rates. Some packaged accounts offer higher interest on savings than basic accounts
It’s worth checking the details when comparing packaged accounts with basic ones. After all, you might not need every perk they offer. For example, if you rarely go abroad, travel insurance might not be much of a money-saver.
How are Monzo’s packaged accounts different?
First things first: we call them plans. We’ve got three to choose from: Extra, Perks and Max. Each one builds on the last, so you can pick the level of benefits that match how you use your money.
Monzo Extra costs £3 a month and gives you advanced budgeting tools:
See balances and transactions from your other banks and credit cards in Monzo
Create virtual cards linked to your Pots. Got a monthly coffee budget? Add it to a Pot, then pay for your coffee straight from your virtual card (5 cards can be active at any time).
Put 2, 5 or 10 times as much spare change aside every time you spend
Create custom categories, like ‘Date night’ or ‘Nan’s hen do’, to group your spending in a way that suits you
Export transactions to Google Sheets automatically
See your TransUnion and Equifax credit scores, updated weekly, plus ways to improve your credit health
Billsback®. A chance to get your bills paid back by us, up to £150 per bill. We pay back at least 1,000 bills every month.
Monzo Perks is £7 a month and includes everything from Extra, plus more, well, perks:
A weekly treat from Greggs. Choose from a sausage roll (classic, chicken or vegan), regular sized hot drink, doughnut or muffin
An Annual Railcard, saving you 1/3 or more on eligible train journeys
An annual Uber One membership
Save on our Monzo Investments platform fee every month (0.35% instead of 0.45%). You'll also pay an additional fund fee, details in the app or on our website.
0.50% AER (variable) boost on Instant Access and Select Access Savings
Fee-free cash withdrawals abroad up to £600 every 30 days
Monzo Max starts at £17 a month (or £22 with family cover) and includes everything in Perks, plus insurance (exclusions apply):
Worldwide travel insurance provided by Zurich, powered by Qover. £50 excess.
Phone insurance for accidental damage and loss, provided by Assurant*. Phones up to £2,000.
RAC UK and Europe breakdown cover
*You must report your phone as missing to your network provider so they can block the SIM to prevent it from being used by someone else. Cosmetic damage is not covered, for example scratches and dents.
Basic or packaged: what’s right for you?
A basic bank account is a solid choice if you want straightforward, free banking. Packaged bank accounts make more sense if the perks – like insurance, better savings rates and the odd weekly treat – end up saving you money.
Our own plans are all about helping you find an account that’s a bit more you. Extra is great if you want better money management tools, Perks adds regular extras and a better savings rate, and Max brings in all sorts of cover.
In the end, it comes down to what’s right for you.
View our current account plans
UK residents only aged 18+ (18-69 for Max). Ts&Cs apply.
*The currant account thing was a joke. Raisins are not a recognised currency.
Questions? Answers.
What’s a basic current account?
A basic current account (sometimes called a basic bank account) is a standard bank account for everyday spending and money management, usually without a monthly fee.
Who would a basic current account be suitable for?
A basic bank account works well if you want simple, no-cost banking to manage your income, pay bills, and handle day-to-day transactions without needing extra perks or insurance.
What’s a packaged bank account?
A packaged bank account is a current account that charges a monthly fee but bundles in extra benefits like insurance, cashback or lifestyle perks. Packaged bank accounts are designed for people who want more than just basic banking and are happy to pay for added value.
Are packaged current accounts worth it?
Packaged bank accounts are great if you'll use the included benefits – things like travel insurance or breakdown cover often cost more if you buy them separately. The key is working out whether a basic bank account meets your needs, or whether packaged bank accounts would save you money and hassle in the long run. It really depends on your lifestyle and what you'll actually use.