work

Back To knowledge base

BANK & OVERDRAFT ACCOUNTS

Current Account.

A Current Account is a type of deposit account typically used by individuals who routinely carry out a high number of transactions with a particular bank.

Current accounts are mainly used to deal with day-to-today transactions e.g. paying bills by direct debit, receiving automated payments such as salarys and also for simply purchasing products with the debit card or withdrawing money from a cash machine.

 

Packaged Accounts.

A Packaged Account is a form of current account that offers extra incentives e.g special offers on overdraft interest rates, different forms of insurance or even car breakdown cover. These additional features usually come at a cost of around £10 to £15 per month.

Jam Jar Accounts.

A Jam Jar Account or "Budgeting Accounts" are overall designed to help you budget. They typically work by dividing your money into different "jars". It is up to you how much money goes into these "jars" by calculating how much you need to cover bills and how much for saving and spending. These types of accounts allow you to pay bills through direct debit as well as receiving payments such as wages.

It is helpful to note that is that the majority of these accounts will charge a monthly fee.

Overdraft.

An Overdraft is when the bank allows you to borrow money through your current account by taking out more money than you have in your account. Doing this typically results in additional charges or interest rates on the amount you take out. Some banks may offer accounts that include an overdraft from the start however you may have to ask some banks for an overdraft to be added to your account 

It is helpful to note that if you are in need of a loan there are many cheaper options available than that of an overdraft so its important to look around before you choose to borrow via an overdraft.

Arranged Overdraft.

An Arranged Overdraft is a form of overdraft which is planned out in advance. This is when you agree a limit with your bank and are capped once you spend a certain amount. It is helpful to note that the bank will still charge you interest and sometimes other fees.

 

Unauthorised Overdrafts.

An Unauthorised Overdraft is when you spend more money than you have in your bank account without agreeing to a limit beforehand. This can also happen if you go over the amount you have agreed to on your arranged overdraft. This will result in added interest rates as well as other fees.