EAR interest rate help!!

Hah

Hey all, I'm considering switching to the first direct account as I've heard loads of good things about them, the only thing is I cannot work out if I will be charged more for my overdraft (which I am paying off, but only just started a new job so it's taking time)...

So, for example I currently pay £1 a day for everyday I am overdrawn, this is my providers version of interest.... this is currently working out at £30 a month!

First direct charge 15.75% ear on anything over £250 and is calculated daily....

So id be paying the interest on £1000 to begin with - can anyone help me at all please try to figure out how much (roughly) this would be per month?? I'm aware I can't get an exact figure as it's variable, but I just need to know if it's worth switching, even if I can be a tenner a month better off. I just can't figure it out.... it's not very simple and I'm not the hottest at maths!!

Thanks so much all :cool::beer:

YorkshireBoy

Very roughly (and ignoring any 0% O/D amount)...

If you were £1K O/D for a year you'd pay debit interest of £157.50

The same £1K at £1/day would be £365

But...if the FD account was returned to credit for some of the month (eg salary hits...delay...spend some...delay...spend some more) the FD savings would be even more.

Hah

Thank you so much!! I'm aware it's not a total exact figure but that's really good to know. Even if it goes to, let's just say for arguments sake, £250 a year on FD that's still a saving!!

Awesome, I'll see if I can switch then. Plus I'll get the bonus for switching.

And I know that at least once a month for a while it'll be back in credit when I get paid, so even more saving!!

eskbanker

Worth bearing in mind that FD may not be willing to offer an overdraft of £1,000 for a new customer, so make sure you find out what limit they'd be prepared to stump up before you commit to a switch!