Monzo claims the insurance policies alone on the £180-a-year account are worth £256 a year, and says this has been verified by market research group Consumer Intelligence.

The mobile phone insurance policy that comes as part of Monzo Premium is from Assurant and Monzo says it’s worth an average of £97 a year.

Phones worth up to £2,000 are protected against theft, loss and accidental damage, with accessories such as headphones, chargers and cases worth under £300 covered too.

Monzo Premium also comes with worldwide family travel insurance from AXA, which the bank says is worth an average of £159 a year.

It covers medical bills up to £10m, lost valuables up to £750, and cancellation costs up to £5,000. It also covers flight delays of more than four hours, and winter sports.

Travellers are covered for cancellation if they or a close relative falls ill with coronavirus or another infectious disease before travel. You’re also covered if the UK government says a person insured by your policy has to quarantine or self-isolate on the date you’re scheduled to leave the UK.

Monzo Premium members earn 1.5% AER interest on current account balances up to £2,000.

While Monzo customers with its basic account can only take out £200 in cash every 30 days before paying a 3% charge, Monzo Premium members can withdraw £600 fee-free each month.

What do I need to sign up?

Monzo Premium is the digital bank’s second paid for account. Monzo Plus launched in July and costs £5 per month.

Monzo Premium has a minimum term of six months. You need to be aged between 18 and 69 to sign up.

Anyone who has a Monzo or Monzo Plus account can upgrade to Monzo Premium via the Monzo app, if they are eligible.

Monzo customers who have Monzo Plus for less than three months can sign up to Monzo Premium without paying the Monzo Plus early cancellation fee.

Monzo has proved popular with millennials since its launch in 2015. It came top of the bi-annual personal banking service quality poll by Ipsos Mori on behalf of the Competition and Markets Authority (CMA) in August.

But, also in August, Monzo posted annual losses of £113.8m after its revenue was hit by the pandemic.