OD Charges?

aj3001

How exactly does an OD work?

All I know about them is there is an interest rate to them and they allow you to go over drawn on your account

What charges are there?

tom188

You basically borrow money short term at a generally uncompetitive rate, paying interest to the bank on the amount of money youve borrowed from them based on the length of time you borrow from them. its like a savings account in reverse if you like.

You get an agreed limit which is the amount the bank will allow you to borrow. Generally in this country this is fee free with just the interest charged. This is your authorised overdraft limit. If you breach this you are charged a fee plus a charged higher interest rate (unauthorised overdraft rate) on what you borrow on top of this.

Visit the reclaiming bank charges board to read about the lawfulness of the charge and you will find pages of debate which personally i dont want to get involved with.