First Direct Charges

I'm thinking of changing my current account from The Royal Bank of Scotland so I'm reading the small print on some other accounts. I particularly like the £762 per month fee on a £501 overdraft to cover the administration costs that First Direct charge!

The interest charge on a £501 overdraft is 10.9% but as it is £1 over an agreed limit you are charged a £30 overdraft fee - which put you £31 plus interest over the limit. If the amount increases it attracts an additional fee of £25 per_DAY_ so after the first day the amount rises by £30 plus interest, the second day by further £25 plus interest etc.

Should the EAR being quoted cover all the charges? It's not 10.9% EAR but more like 1900% EAR on a £501 overdraft.

I'd phone FD and ask, if I were you. It's highly unlikely they count their own charges in the same way as other debits (which do attract a daily charge each time they cause the overdraft to increase that day).

If you are likely to run near your limit, set up SMS alerts (free at the moment, but about to cost a couple of quid per month). DDs and SOs are shown on the messages that go out around 6-7am each day, and if you need to top up the account, you have the rest of the banking day to do so. I can't guarantee this works if you hit your overdraft limit, though. Again, FD can probably confirm. I'm very happy with the service I've had from them, but they may not be the best choice if you wish to transgress their rules on a regular basis.