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
      91%
      OK
      6%
      Poor
      3%
    • Go to site

      Phone

      More details

    Cashback

    Receive £100 cashback when you switch your current account to first direct- T&Cs apply

    Great for
    Receive £100 cashback and access to £250 interest free overdraft when you switch your current account to first direct – overdraft subject to status
    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
    Pack fees range from £6 to £15.50 per month
    • 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
      42%
      OK
      38%
      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)
    But be aware that
    When you go over your £200 overdraft limit, daily fees are charged on the whole balance of your arranged overdraft
    • Provider/Product name FlexAccount

      FlexAccount

    • Overdraft Rate (EAR) 0% 1st 3 months
    • Overdraft Buffer 3 months interest free
    • Customer Service Rating
      Great
      77%
      OK
      19%
      Poor
      4%
    • 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
    • Provider/Product name FlexDirect

      FlexDirect

    • Overdraft Rate (EAR) 0% 1st 12 months
    • Overdraft Buffer 12 months fee free
    • Customer Service Rating
      Great
      77%
      OK
      19%
      Poor
      4%
    • 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
  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
    There’s no monthly fee to pay for 12 months. After that, you pay £2 a month

    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. £150 Cashback

    Receive £150 Cashback when you switch your Current Account to the Co-operative Bank. Subject to status and qualifying criteria

    Great for
    Receive £150 Cashback when you switch your Current Account to the Co-operative Bank. Subject to status and qualifying criteria
    The Co-op current account and £150 switch offer are subject to status and qualifying criteria. £150 offer requires a full switch with 4+ active Direct Debits to a qualifying current account.
    But be aware that
    £150 Cashback offer excludes existing customers paying in £800+ per month from 03/02/16 to 03/05/16 and any recipients of previous switching incentives. Offer can be withdrawn at any time. Terms apply
    This account is available to UK residents aged 16 plus. Overdrafts are only available to account holders 18 or over. Subject to status.

    Representative Example:

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

  4. £150 Cashback

    Receive £150 Cashback when you switch your Current Account to Smile. Subject to status and qualifying criteria

    Great for
    Receive £150 Cashback when you switch your Current Account to smile. Subject to status and qualifying criteria
    The smile current account and £150 switch offer are subject to status and qualifying criteria. £150 offer requires a full switch with 4+ active Direct Debits to a qualifying current account.
    But be aware that
    £150 Cashback offer excludes existing customers paying in £800+ per month from 03/02/16 to 03/05/16 and any recipients of previous switching incentives. Offer can be withdrawn at any time. Terms apply
    This account is available to UK residents aged 18 plus. 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.

  5. Great for
    Award winning mobile banking - pay your contacts anytime
  6. Great for
    Award winning mobile banking - pay your contacts anytime
  7. 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 
  8. 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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