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.

  1. Great for
    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
  2. £100 Cashback

    Receive £100 cashback when you switch

    Great for
    Earn a market leading 6% interest from first directs regular saver - Open to first direct banking customers only
    Satisfaction guarantee
    But be aware that
    Minimum monthly funding of £1,000
    No interest paid on balances in credit
  3. Exclusive

    £125 M&S Gift Card reward when you switch using the Current Account Switching Service

    Great for
    Earning M&S points for debit card spending - One point for every £1 spent, 100 points equate to £1 in M&S vouchers
    £100 overdraft buffer if you dip into the red
    But be aware that
    To qualify for the £125 gift card you must use the Current Account Switch Service

    Representative Example:

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

  4. 2014 SUPERS

    Highly Commended provider of 2014

    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
  5. Great for
    Earn a minimum of 1% cashback at selected retailers and an additional 1% cashback on contactless purchases
    Award winning mobile banking - pay your contacts anytime
  6. Great for
    Earn a minimum of 1% cashback at selected retailers and an additional 1% cashback on contactless purchases
    Award winning mobile banking - pay your contacts anytime
    • Provider/Product name FlexDirect

      FlexDirect

    • Overdraft Rate (EAR) 0% 1st 12 months
    • Overdraft Buffer 12 months fee free
    • Customer Service Rating
      Great
      69%
      OK
      25%
      Poor
      6%
    • Go to site

      Phone

      More details

    Market leading

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

    Great for
    Highly commended provider 2014 Moneysupermarket.com Supers Awards
    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
  7. Great for
    £100 cash back when you switch using The Co-operative Bank switching service
    The Co-operative Bank will also donate £25 to charity
    But be aware that
    Terms apply for the £100 offer. See 'more details' page or visit providers site for full details

    Representative Example:

    The advance of credit of £1,200 at an interest rate of 18.9% EAR variable per annum. A formal overdraft service charge of £20 per annum will be charged when The Co-operative Bank agree the overdraft limit and at renewal.

  8. Great for
    £100 cash back when you switch using The Co-operative Bank switching service
    The Co-operative Bank will also donate £25 to charity
    But be aware that
    Minimum monthly funding £800
    Terms apply for the £100 offer. See 'more details' page or visit providers site for full details

    Representative Example:

    The advance of credit of £200 at an interest rate of 18.9% EAR variable.
    Debit interest of 18.9% per annum is charged on the total overdrawn balance. For overdrafts over £200 a £20 fee is payable on set up, when The Co-operative Bank agree new limits and upon each annual renewal of the overdraft. Subject to status.

  9. Great for
    Earn up to 15% cashback with Everyday Offers at the kind of places you shop by using your Bank of Scotland debit card
    Have the chance to be paid back for something you've bought up to £500 with your Bank of Scotland 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 Bank of Scotland Classic Account, the overdraft interest rate Bank of Scotland 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.

  10. Great for
    Earn up to 3.00% AER variable (2.96% Gross) on your account with balances between £3,000 and £5,000
    Earn up to 15% cashback at the kind of places you shop by using your Bank of Scotland debit card
    But be aware that
    Must pay in minimum £1,000 a month and stay in credit to earn interest. Lower interest rates apply to lower balances
    Available to internet banking registered current account customers aged 18+. Offers and cashback amounts vary

    Representative Example:

    If you use a Planned overdraft limit of £1,200 on the Bank of Scotland Classic Account, the overdraft interest rate Bank of Scotland 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.

  11. 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.

  12. Market leading

    Best rate for balances between £3,000 and £20,000

    Great for
    Cashback on your household bills
    1% cashback on your Santander Mortgage
    But be aware that
    £2 monthly account fee
    Minimum monthly funding of £500
  13. Great for
    No minimum funding required
    Free switching service – dedicated team that manages the switch for you
  14. £100 reward

    Great for
    £100 reward for switching. Your switch is covered by the Current Account Switch Guarantee
    Worldwide family travel insurance, car breakdown cover, mobile cover and more, provided by selected third parties
    But be aware that
    To qualify for £100, use the Current Account Switch Service to transfer and close your old account held elsewhere. Excludes anyone who's had £100 for switching since Jan 2012
    £15 monthly fee. This is reduced to £10 in each calendar month you pay in £750 or more, pay out two different Direct Debits and stay in credit

    Representative Example:

    If you use a planned overdraft of £1,200, then Halifax charge you a daily fee of £1. For Ultimate Reward Current Accounts, you will pay the higher monthly account fee of £15 rather than £10 if you use your overdraft. This means there will be an additional indirect cost of £5 if you use a planned overdraft on this account. Overdrafts are subject to status.

  15. Up to £160 reward

    Great for
    Earn up to £160 reward in the first year - made up of £100 for switching. Your switch is covered by the Current Account Switch Guarantee
    and 12 x £5 reward each month you pay in £750+, pay two different Direct Debits and stay in credit
    But be aware that
    To qualify for £100, use the Current Account Switch Service to transfer and close your old account held elsewhere. Excludes anyone who's had £100 for switching since Jan 2012
    Account terms and conditions apply
    • Provider/Product name Current Account

      Current Account

    • Overdraft Rate (EAR) Planned: £1 a day up to and inc. £1,999.99
    • Overdraft Buffer £10
    • Customer Service Rating
      Great
      38%
      OK
      41%
      Poor
      21%
    • Go to site

      Phone

      More details

    Great for
    A standard current account for your day-to day banking

    Representative Example:

    If you use a planned overdraft of £1,200, then Halifax will charge you £1 a day when you use it. Overdrafts are subject to status.

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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