Banking/Savings Section

Bank Accounts With Great Overdraft Deals - Serious Money Can Be Saved

June 2006

If you're the kind of person whose bank account either stays in the red a lot or regularly goes overdrawn for short periods of time then it makes so much financial sense to sort out an account which offers a fair deal on overdrafts.

Here's a rundown of what's available in today's market -

Alliance & Leicester Premier Direct Account

• An outstanding deal because it offers a free (no interest) overdraft of up to £2,500 for the first year, the rate then goes to 5.9% which again is outstanding
• If you go over £2,500 then interest is charged at 5.9%
• 2 small catches, 1) at least £500 a month must be paid in alongside having an email address as all statements are emailed
• The A&L Premier Direct website

Barclays Current Account

• All new current account customers are offered a free overdraft for the first year
• After the first year however this rate moves up to a nasty 15%+
• To qualify for the free overdraft you’ll need to pay in at least £1,000 a month
• Barclays website

Nationwide FlexAccount

• No free overdraft but any red balance is charged at a respectable 7.75% (up to an agreed limit)
• And if you pay in a minimum of £1,000 a month the bank will pay you 4.25% on balances up to £3,000
• Nationwide Building Society website

Summary

Being overdrawn is not necessarily bad but being overdrawn and paying your banks greedy rates (often as high as 25%) is crazy. This is why seeking out the best bank account for your needs is such a necessity because it brings down your overall interest charges and is hence a major money saver.

The Alliance & Leicester looks like the best deal with a free £2,500 overdraft for the first year and you can bet that when this expires some other bank will be promoting a special overdraft rate or offer. Changing or opening new bank accounts is simple these days so it’s really possible with a few hours work to save many hundreds of pounds.

See Also

• The A&L Premier Direct website
• Nationwide Building Society website
• Barclays website
• Find's list of Online Current Accounts