BANKING GUIDE GUIDE
Banks will often
allow you to overdraw your current account. If you have arranged for an overdraft
facility on your account you will be charged an authorised overdraft rate
the rate of interest that you will pay on your overdrawn balance if you remain
within your authorised limit. If you have not arranged an overdraft facility or
exceed your authorised limit you will be charged interest at the unauthorised
overdraft rate. This rate will be much higher than the authorised rate. You may
also be charged a fee for being overdrawn. Any fee levied will depend on whether
the overdraft is authorised or unauthorised.
Some banks will
allow a certain overdraft without charge, for example £100, but for higher
amounts you will usually be charged for the facility.
These accounts offer the facility of a chequebook / cashcard and do not require
any notice to be given to withdraw funds. The accounts vary in the facilities
offered such as cheque guarantee cards, debit cards and overdrafts etc. It may
be possible to operate some of these accounts via branch, post, telephone or the
such as minimum balance requirements, minimum amount of transaction, whether a
cash card is available, any limits to the number of withdrawals, and any rate
of bonuses or guarantees will vary depending on which account you choose.
Current Account and Offset Mortgages
A current account mortgage allows you to operate your mortgage borrowing through
a current account. This method enables you to save interest as your normal cash-flow
will alter the outstanding debt. You will be required to pay your salary into
An offset mortgage
allows you to keep your balances e.g. mortgage, savings, current account etc in
separate accounts but all balances are offset against each other thus allowing
the possibility of reducing the interest paid and could result in the mortgage
being repaid early.