Going into the red

19.08.2005 Unauthorised overdrafts can be costly. This is why it is important to think ahead. If you forsee that you will need to take out a large a sum of money, then speak to your bank manager and organise an authorised overdraft.

Typical High-Street banks can charge as much as 30 per cent in interest for unauthorised overdrafts, and often there are further fees added on for administration.
Many banks include buffers in their accounts which are meant to accommodate those times when you go into the red accidentally. Some automatically apply a buffer zone of up to ₤50 or ₤100. If your salary is irregular or you find it impracticable to plan all your financial outgoings each month, then you might want to consider an added value account which although not free can sometimes entitle the holder to an interest free overdraft.