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
      90%
      OK
      7%
      Poor
      3%
    • Go to site

      Phone

      More details

    Exclusive

    Receive £125 cashback when you switch your current account to first direct. You won't find this offer anywhere else. T&Cs apply. Limited offer, ends 27th March 2017

    Great for
    Receive £125 cashback and access to £250 interest free overdraft when you switch your current account to first direct – overdraft subject to status
    Earn 5% interest from first direct’s regular saver and gain access to preferential products available to first direct customers only
    But be aware that
    Minimum monthly funding of £1,000
    No interest paid on balances in credit
    • Provider/Product name Current Account

      Current Account

    • Overdraft Rate (EAR) Interest free on the first £100
    • Overdraft Buffer £100 interest free
    • Customer Service Rating
      Great
      68%
      OK
      19%
      Poor
      13%
    • Go to site

      Phone

      More details

    Switching Gift Card!

    Earn up to £170 on an M&S gift card! Receive £50 when you switch and up to £120 when you stay! Conditions apply, see T&Cs

    Great for
    Switch to M&S and earn £50 on an M&S gift card plus £5 gift card top up per month for up to 24 months. See T&Cs
    Access to the 5% AER high interest rate M&S Monthly Saver account. See T&Cs
    But be aware that
    To qualify for the £50 gift card you must use the Current Account Switch Service and have two active direct debits
    To qualify for a £5 monthly top up on your gift card you must have two active direct debits and a minimum monthly funding of £1,000

    Representative Example:

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

  1. Cashback

    New customers get £200 and a 6 month interest and fee free overdraft when they switch and stay. T&Cs apply, please see provider site for full details. Limited offer, ends 29th March 2017.

    Great for
    Get £150 & a 6 month interest and fee free overdraft when you complete a full switch, with 2 direct debits or standing orders, to the HSBC Advance Bank Account using the Current Account Switch Service
    Receive a further payment of £50 after 12 months when you register for Mobile or Online Banking within 60 days of account opening
    But be aware that
    HSBC Advance Bank Account requires minimum monthly funding of £1,750. You must continue to meet account eligibility criteria in order to receive the further payment
    If you are an existing HSBC current account customer, unfortunately you are not eligible for the available cash back

    Representative Example:

    If you use an overdraft of £1,200 on an HSBC Advance Bank Account, the overdraft rate we will charge is 17.9% EAR (variable). If you switch to the HSBC Advance Bank Account using the Current Account Switch Service, your rate will be 0% for the first 6 months.

    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

    • Provider/Product name FlexAccount

      FlexAccount

    • Overdraft Rate (EAR) 0% 1st 3 months
    • Overdraft Buffer 3 months interest free
    • Customer Service Rating
      Great
      79%
      OK
      17%
      Poor
      4%
    • Go to site

      Phone

      More details

    Great for
    Dedicated switching service to personally manage your account opening
    But be aware that
    Overdrafts are subject to approval
  2. Great for
    Keeping track of all your payments and spending over time – B brings all the important stuff into one place
    You’ll have a grace period of two working days if you do go overdrawn
    But be aware that
    A compatible smartphone and tablet is required to access all of B’s features
    B is available for anyone from the age of 16. If you want to apply online, you’ll need to be at least 18

    Representative Example:

    Representative Example:(this example is for illustration purposes only). Rate of interest - 11.84% per annum (variable), Total amount of credit - £1200, EAR – 12.50% variable, Monthly Planned Usage Fee £6.00 with a £25.00 buffer and a two Business Day grace period before any fee is charged (maximum 1 fee per month). The rate of interest shown is an Effective Annual Rate (EAR), this is the cost of borrowing on current accounts which takes account of the rate of interest charged, the frequency it is levied to the account and the compounding interest.

  3. Great for
    Award winning mobile banking - pay your contacts anytime
  4. Great for
    Award winning mobile banking - pay your contacts anytime
  5. 2016 SUPERS

    Winner of the Best 'Loyalty’ Current Account Provider

    Great for
    Monthly cashback on selected household bills
    Monthly interest of 1.5% AER (variable) payable on your entire balance up to £20,000
    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 and have at least two active Direct Debits
  6. 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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