interest rate
 

Hi guys,

I hope someone can help.

I've increased my Over draft to £3,000.

Planned Overdraft limit:£3,000.0
Interest and fee free amount: £2,000.00
Interest rate:1.3%/16.77 % EAR (Equivalent Annual Rate)
Monthly overdraft usage fee:£6.00

Can someone shed light on this please?!

your bank should be able to explain it to you :)

I think it means you can go to $2,000 without paying interest but for anything over the $2,000 and under your limit of $3,000, you pay interest on it at 1.3% per month. So if you spend $2,340 you pay 1.3% interest on the $340. Not a bad deal actually.
You also pay $6 a month for the pleasure of having an overdraft.

Yep, what effervescence said, you can use up to £2000 without any worries. And interest on the amount you go over. Did the person at the bank not explain? Please go back if you're not sure, it's part of their job.

For the record, I have what's called an interest paying deposit account, which tops up my current account automatically on a daily basis. It seemed a good idea, but the deposit account actually pays me only about .5% interest, while if I were to overdraw on my current account I'd be charged something like 15%. This is bloody usury!

No wonder the banks are creaming it off. And the sooner their normal business is separated from their investment business, the better ...

Tony.

Change your setup Tony?!

Just get a free or cheap current account with as small an overdraft as possible (or, preferably, none) and a high interest savings account.

+

Yes yes yes to both of these.

But also, it'd definitely be worth clarifying with your bank. If you're going to pay a monthly fee etc. it's important for you to understand what you're paying for and how.

So. Much. Spam.