How does an overdraft work?

Haven't got a FD account so wouldn't know, but it is standard in most UK banks that an OD facility is subject to status and a minimum amount being paid in at a regular interval each week or month (or even year). It is normal to have a clause stating that an OD is immediately repayable upon demand, but unless you do something really bad, then they don't usually insist you do that. That clause is more psychological then anything. If you stop having a regular income or abuse the overdraft limit then they will probably take it away, and then ask you to repay it, and usually over a set period depending on how large it is.

Its 'Fee Free', i.e. no arrangement or usage 'fees' , however they do charge interest on it, so it isn't really completely free.

Nick

Usually, Terms and Conditions cover that sorts of issues. Like, £28 fine for going above overdraft limit. And your obligation to pay money on bank's request.

Vadim

free overdraft means no penalties, but you get charged interest at 9.9% EAR.

see

they are NOT giving you interest-free credit, so don't just go and spend the money

Student account overdrafts, however, are allowed upto around 1250 in your first year, maxing out at 1600 in your third year, all interest free for upto three years after you graduate. Fantastic ;-) Especially when some are in an ING account @ 5pc and some in P.Bonds which have already won me

Joe (who will miss such facilities, no doubt, when he graduates)

...or 15.9% if its their 'Cheque Account' where you receive paper statements through the post, as opposed the internet only 'Bank Account' when it is 9.9 %

Nick

"Nick Read" wrote

... or 5.75% if it is linked to your offset mortgage ...

"Nick Read" wrote

I receive paper statements through the post for *both* "Cheque" *and* "Bank" accounts!

"Nick Read" wrote

... or 5.75% if it is linked to your offset mortgage.

Really?! Do you have to pay for the statements on the Bank Account or have they changed their policy on this? I asked them some time ago if I could have a Bank Account but still receive paper statements and they said no. That was the only reason I didn't change my Cheque Account to Bank some time ago.

Nick

"Nick Read" wrote

Yep!

"Nick Read" wrote

Nope.

"Nick Read" wrote

Probably. I think I took out mine back when they did send statements, and they have continued. I think *new* accounts don't get them ...

"Nick Read" wrote

They're a friendly enough bunch - why not try asking them if they would do it anyway?

Thanks, that's exactly what I did. They have apparently just recently changed the terms on the Bank Account so postal statements are now completely free, however it seems you have to ask for them. They don't advertise the fact, and anyone opening a new account wouldn't receive them by default. As a result I immediately changed my account with them from Cheque to Bank on the condition that I get 'proper' statements, which they were happy to do!

I'm really glad you mentioned this, because I would never have known otherwise, and it now means I get cheaper overdrafts and credit interest of a not too bad 2 %, instead of a paltry 0.1 %!

Cheers,

Nick