First Direct - Overdraft?

johnfowles

Hi everyone.

I've just moved current account, over to FD. First impressions, they're fantastic. Only thing is that I'm slightly confused about the overdraft facility on the 1st account. They have given me a £500 overdraft (with no interest charged on the first £250).

However they state that:

' An indicative total charge for credit for this facility is £39.75 '

This fee has been waived as it is my first time opening the account. But will I be charged this at some point? I hardly ever go into my overdraft and plan to keep it this way. Should I cancel the overdraft right now?

Many thanks,
John

premierfella

Nothing to worry about here, and I certainly wouldn't advise cancelling the overdraft!

Like all lenders, First Direct are required to give certain information on the cost of credit. The £39.75 indicative figure here is based on you running a constant £500 overdraft for a year (i.e. interest on £250 of the overdraft).

If you run the account within the £250 interest free portion of the overdraft, there will be no fees or interest. An overdraft between £250 and £500 would incur interest only (no fees) on the part over £250.

The only things to be aware of are potential "arrangement fees" if you exceed the £500 overdraft limit or apply for a change in the overdraft limit (the paperwork will advise you of the circumstances where the arrangement fee would not be incurred).

I assume you are already aware of the potential monthly fee for the 1st Account (which is easily avoided):

Banking with first direct usually costs £10 a month, but it's free when you pay in at least £1,500 to your 1st Account each month, or maintain an average monthly 1st Account balance of £1,500, or hold a selected first direct additional product.

johnfowles

Many thanks for the reply! I shan't be running £500 under for a whole year, that is certain...

And yes, I will be keeping a balance for £1700 in there, just to keep it safe above the £1500!

Thanks again.