Overdraft current accounts

Every penny counts, especially if you’re overdrawn. Don’t pay more than you need if you’re regularly in the red. Overdraft costs vary significantly so compare accounts now and make sure you’re getting the best deal….

Overdraft current accounts - Order based on scenario of 15 days overdrawn by £500 over a 24 month period. Based on first 24 months of account opening.

    • Provider/Product name 1st Account

      1st Account

    • Overdraft Rate (EAR) Interest free on the first £250
    • Overdraft Buffer £250 interest free
    • Customer Service Rating
      Great
      92%
      OK
      7%
      Poor
      1%
    • Go to site

      Phone

      More details

    Exclusive

    £150 cashback when you switch your current account to first direct through MoneySuperMarket!

    Great for
    Receive £150 cashback when you switch to first direct through MoneySuperMarket
    Earn a market leading 6% interest from first direct's regular saver and access preferential mortgage rates - open to first direct banking customers only
    But be aware that
    Minimum monthly funding of £1,000
    No interest paid on balances in credit
  1. Great for
    Earn up to £15/month loyalty rewards
    Earn enhanced cashback at over 100 online retailers and Expedia when you shop through SmartSpend
    But be aware that
    £3 monthly fee
    Must pay in at least £800 & pay out at least two direct debits every month to be eligible
    • Provider/Product name Bank Account

      Bank Account

    • Overdraft Rate (EAR) £200 fee free when you add a pack
    • Overdraft Buffer £200 fee free when you add a pack
    • Customer Service Rating
      Great
      38%
      OK
      42%
      Poor
      20%
    • Go to site

      Phone

      More details

    Great for
    Switch a range of other Features on or off to suit your needs
    Contactless debit cards (subject to status)
  2. Switching Gift Card!

    Earn up to £220 on an M&S gift card! Receive £100 when you switch and up to £120 when you stay! Conditions apply, see T&Cs

    Great for
    Switch to M&S and earn £100 on an M&S gift card plus £10 gift card top up per month for up to 12 months. See T&Cs
    Access to the 6% AER high interest rate M&S Monthly Saver account. See T&Cs
    But be aware that
    To qualify for the £100 gift card you must use the Current Account Switch Service and have two active direct debits
    To qualify for a £10 monthly top up on your gift card you must have two active direct debits and a minimum monthly funding of £1,000

    Representative Example:

    0% EAR variable on the first £100. 15.9% EAR variable thereafter.

    • Provider/Product name FlexAccount

      FlexAccount

    • Overdraft Rate (EAR) 0% 1st 3 months
    • Overdraft Buffer 3 months interest free
    • Customer Service Rating
      Great
      74%
      OK
      21%
      Poor
      5%
    • Go to site

      Phone

      More details

    Great for
    Free Multi-trip travel insurance
    Dedicated switching service to personally manage your account opening
    But be aware that
    Minimum monthly funding of £750 to qualify for the travel insurance
  3. £120 cashback

    £120 when you switch your current account using the Current Account Switch Service. T&Cs apply

    Great for
    £120 when you switch to the HSBC Advance Bank Account using the Current Account Switch Service within 30 days of account opening
    Access to a fixed rate of 6% AER/gross on HSBC's Regular Saver for 12 months
    But be aware that
    Minimum monthly funding of £1,750 or six-monthly funding of £10,500 required
    Minimum and maximum monthly deposit limits apply to HSBC's Regular Saver. No partial withdrawals are permitted

    Representative Example:

    assuming a formal overdraft of £1,200 on the HSBC Advance Bank Account, the overdraft rate is 17.9% EAR variable. Therefore, if you used £500 for 10 days, you would pay £2.27 in interest

    EAR is Effective Annual Rate. This takes account of the interest rate and how often interest is charged, and does not include any other fees or charges.

    Overdrafts are subject to status.

    • Provider/Product name FlexDirect

      FlexDirect

    • Overdraft Rate (EAR) 0% 1st 12 months
    • Overdraft Buffer 12 months fee free
    • Customer Service Rating
      Great
      74%
      OK
      21%
      Poor
      5%
    • Go to site

      Phone

      More details

    Market leading

    This is the best rate for balances up to £2,500

    Great for
    In credit interest of 5% AER on balances from £1 to £2,500. Conditions apply
    Dedicated switching service to personally manage your account opening
    But be aware that
    Minimum monthly funding of £1,000
    After 12 months the interest rate lowers to 1% AER
  4. Exclusive

    Get £100 for switching when you apply through MoneySuperMarket - plus up to £5.50 per month. Ts&Cs apply

    Great for
    Rewarding you up to £5.50 every month for simply doing Everyday Banking things
    To be rewarded £4 per month and 5p per debit card transaction (max £1.50), each month: pay in £800+, stay in credit/within agreed overdraft limit, log in to Online or Mobile Banking, remain opted in for Paperless Statements & pay out 4+ Direct Debits
    But be aware that
    Overdrafts are only available to account holders 18 or over. Subject to status.
    To qualify for Everyday Rewards you must meet all the qualifying criteria and opt in to the scheme. Account Terms & Conditions apply

    Representative Example:

    The advance of credit of £1,200 at an interest rate of 18.9% EAR variable per annum.

  5. Great for
    smile Current Account comes with a £500 overdraft as standard
    But be aware that
    Overdraft - Debit interest of 18.9% EAR per annum is charged on the total overdrawn balance. All overdrafts are subject to status

    Representative Example:

    The advance of credit of £500 for a 12 month term at an interest rate of 18.9% EAR Variable. Total amount payable £594.50. Interest is payable each month and the remaining balance would be repayable in one installment at the end of the term.

  6. £150 cashback

    £150 cashback when you switch your current account to Clydesdale Bank. T&Cs apply

    Great for
    2% AER in credit interest. Use for end of month balances or savings
    9.9% EAR Overdraft rate – great option for overdraft occasional users
    But be aware that
    Minimum monthly funding £1,000
  7. £150 cashback

    £150 cashback when you switch your current account to Yorkshire Bank. T&Cs apply

    Great for
    2% AER in credit interest. Use for end of month balances or savings
    9.9% EAR Overdraft rate – great option for overdraft occasional users
    But be aware that
    Minimum monthly funding £1,000
  8. Great for
    Earn up to 15% cashback at the type of places you regularly shop by using a Lloyds Bank debit card
    Have the chance to be paid back for something you've bought up to £500 with a Lloyds Bank debit card
    But be aware that
    Available to internet banking registered current account customers aged 18+. Offers and cashback amounts vary
    Available to customers who register for Everyday Offers cashback via Internet Banking

    Representative Example:

    If you use a Planned overdraft limit of £1,200 on a Lloyds Classic Account, the overdraft interest rate Lloyds Bank will charge on the first £25 will be 0% EAR variable and a monthly overdraft usage fee will not apply. The overdraft interest rate on the next £1,175 will be 19.94% EAR* variable and a monthly overdraft usage fee of £6 will apply.
    *EAR is the Equivalent Annual Rate. This is the actual annual rate of an overdraft. It doesn't take into account other fees and charges.

    Overdrafts are subject to application and approval.

  9. Great for
    Earn up to 4% AER / 3.93% Gross variable interest on your balance up to £5,000
    Get exclusive access to a range of great banking offers
    But be aware that
    For the monthly £5 fee to be waived, a minimum of £1,500 must be paid into your account each month
    To qualify for credit interest you need to pay two different Direct Debits from your Club Lloyds current account each calendar month

    Representative Example:

    If you use an arranged overdraft of £1,200 you'll be charged 19.94% EAR (variable) + £6 per month

  10. Great for
    Award winning mobile banking - pay your contacts anytime
  11. Great for
    Award winning mobile banking - pay your contacts anytime
  12. 2016 SUPERS

    Winner of the Best 'Loyalty’ Current Account Provider

    Great for
    Monthly cashback on selected household bills
    Monthly interest of 3% AER (variable) payable on your entire balance up to £20,000, when you have at least £3,000 in your account
    But be aware that
    A £5 account fee will be taken from your account each month
    You must pay in at least £500 each month 
  13. 2016 SUPERS

    Winner of the Best 'Loyalty’ Current Account Provider

    Great for
    No minimum funding required
    Free switching service – dedicated team that manages the switch for you

Overdraft guide

What is an overdraft?

Most current accounts offer an overdraft facility which means you can spend more money than you have in your account. This can be useful if you have an expensive month or receive an unexpected bill just before their pay cheque is due, for example.

For most people, a bank overdraft works as a buffer to protect them from bouncing cheques and failed direct debits if they run out of cash during the month.

Who do they suit?

Bank accounts with an overdraft can be helpful for a variety of situations. For example, a student might use a generous undergraduate overdraft facility to help fund their degree, while a self-employed contractor might use their bank overdraft to meet their bills while awaiting payment.

Even if you don’t need an overdraft generally, you will usually be offered one when you switch current accounts, simply in order to shield you from the risk of defaults and unauthorised overdraft charges while your salary is moved over.

The cost of going overdrawn varies hugely though so if you do regularly go into the red, it’s well worth looking for a current account that offers a competitive overdraft rate.

Benefits

Current accounts with overdraft facilities can give you greater flexibility in managing your money. For some, they provide a much-needed additional resource to dip into when things are tight. A current account overdraft will ease the pressure if there is little room for manoeuvre when it comes to your income and outgoings.

Some current accounts offer interest-free overdraft buffers – up to £200 or £250 - which can be great if you only go overdrawn by a small amount. However, if you go into the red by more than that you will have to pay for the privilege.

Negatives

Although some bank overdrafts are interest free – particularly student accounts – most will charge interest or a flat daily fee for those times when you dip into the red. Some accounts charging a daily fee cap their overdraft fees at a set amount a month, whereas others will charge you for every single day. That means it’s essential to compare current account with overdrafts and find the best and cheapest deal for you.

You won’t automatically qualify for an overdraft however, so don’t assume you can just slip into the red as and when you want. The charges are steep for going overdrawn without permission – you could be charged up to £35 for every transaction that is processed and you will probably pay a higher rate of interest, or a higher daily fee. These fees and higher rates also apply if you exceed an agreed overdraft rate without authorisation.

It’s therefore really important to speak to your bank and ensure you have an overdraft facility in place if you think you might need it.

However, you should also be aware that you may not qualify for an overdraft, or you could be offered a lower limit than you were hoping for. Your bank or building society will run a credit check on you if you ask for an overdraft facility and any decision will depend on any your past history of managing credit and also whether you have any other outstanding borrowing on things such as loans and credit cards.

If you have a poor credit history you may struggle to qualify for an overdraft.

Alternatives

A credit card or loan may be worth considering as an alternative to an overdraft.

If you don’t need an overdraft facility, then focus on other features when choosing a current account, such as how much interest you’ll earn on your balance in credit.

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