An overdraft is an additional amount of money that is drawn down from a current account when it is in debit. Overdrafts are generally supposed to a short-term facility used to temporarily increase your cashflow.
Most banks charge a fee for putting an agreed overdraft facility in place and the same again annually to renew the facility. The charge for this can range from
- €30 at Bank Of Ireland
- €25 at PTSB
- €25.39 at AIB
- €25 at KBC
EBS don’t do overdrafts.
Interest Rates on agreed Overdrafts.
Interest rates on agreed overdrafts range from –
11.85% at AIB to 15.55 at Ulster Bank.
(BOI 13.25% , KBC 13.5% , PTSB 15% )
Unauthorised Overdraft Interest rates .
The Banks have interest surcharges for unagreed overdrafts – these can be as much as an extra 12% – bring the rate up to a fairly massive 27% in the case of PTSB. This is the highest overdraft interestrate of all the Irish banks. Ulster is next at 25.55% followed by AIB at 23.85% and KBC at 21.5% and then BOI at 20.45%
Overdrafts are best avoided if at all possible as they are an expensive way of borrowing money – especially if you go go overdrawn without a formal agreement. You would pay lower rates on some credit cards.
Instead of an overdraft, it would even be worth considering a personal loan. See the lowest rates for personal loans .
(Figures correct as at February 2019 )
See more about Current Bank Account Charges in Ireland here