Interest Rates on Overdrafts
An overdraft is an additional amount of money that is drawn down from a current account when it is in debit. Overdrafts are generally a short-term facility used to temporarily increase your cashflow.
The Bank of Ireland current account overdraft rate is 14.8% on authorised amounts – this is the highest of all the Irish banks. AIB is only very slightly lower at 14.79%
National Irish Bank has the lowest overdraft rate of 11.43%
(Figures as at March 12th 2010)
Banks also have interest surcharges for unagreed overdrafts – these can be as much as an extra 12% – bring the rate up to a fairly massive 26.79% in the case of AIB
As well as charging the highest rates – BOI and AIB also charge in the region of €25 for putting an overdraft facility in place and the same again to renew the facility. National Irish Bank, Permanent TSB, Ulster Bank have no overdraft set up fees.
Overdrafts are best avoided if at all possible as they are an expensive way of borrowing money. If you go go overdrawn without a formal agreement – you will pay higher interest rates, plus additional fees.
You would pay lower rates on some credit cards – i.e AIB Click Visa is only 8.5% on purchases.
Instead of an overdraft,it would be worth considering a personal loan. See the lowest rates for personal loans .