Running your bank or building society account doesn’t have to cost much. In fact, if you don’t go overdrawn and use your cards carefully, you might pay nothing at all. Find out about some of the most common charges you might face.
Overdraft interest and charges
If you have a current account, it might be possible to take out more money than you have in your account. This is known as an overdraft.
There’s usually a cost for using your overdraft.
Banks and building societies charge between 15% and 40% APR (annual percentage rate) for using your overdraft.
Learn more about them in our guide Overdrafts explained
If you go over your authorised overdraft limit, you might be charged for every cash withdrawal or cheque or card payment you make.
This happens even if the bank doesn’t allow the payment to go through. However, if the bank does charge a fee for rejecting a payment, its fee must be in proportion to its costs.
If there isn’t enough money in your account to cover a Direct Debit or standing order, the bank can refuse to make the payment and charge you.
Find out more in our guide to Direct Debits and standing orders
Monthly Maximum Charges
Current accounts now have a Monthly Maximum Charge (MMC) in place. This is the maximum amount you’d pay each month in fees, charges and interest on unarranged overdrafts.
It doesn’t affect authorised overdrafts. And the amount varies depending on the bank or building society, and which current account you have.
Make sure you check what the MMC is with your current account so you know how much your overdraft is costing you.
In the UK, taking money out of a cash machine with your debit card is usually free.
However, there are some exceptions:
- Some convenience cash machines – especially ones inside small shops, on garage forecourts and in nightclubs – can charge up to £5 each time you withdraw money from them. They’ll tell you about the charges on screen before you take out the cash so that you can decide if you want to go ahead.
- Using a credit card to take out cash comes with a charge – typically around £3 – and you pay interest from the date you take out the money. Interest-free periods only apply to card purchases.
- Some prepaid cards charge you a fee to take out money from cashpoint machines.
Banks charge fees of up to 3% for most foreign transactions, such as using your debit card to:
- take out cash from cash machines
- buy things while you’re abroad.
These fees are usually called ‘load fees’ or ‘non-sterling transaction fees’.
Some banks might also add an extra fee – which might be called a ‘non-sterling purchase fee’. These are often flat fees of between £1 and £3, which are applied to every transaction.
Most same-day bank transfers are free using the Faster Payment Service (FPS). But all banks cap the amount you can transfer each day using this Faster Payments system.
The lowest limits are around £10,000. If you’re making a large transfer – as part of a house purchase, for example – you might need to move larger amounts at short notice.
Some banks are able to temporarily raise their Faster Payments limit to enable larger transactions free of charge. But others will use the CHAPS payment system, and will charge you a fee of between £15 and £55 for the transfer. Find out more about the CHAPS system on the UK Finance website
Find out more in our guide How to transfer money from your bank account
Fees for one-off items
Each bank has a list of fees it charges for one-off items, such as:
- stopping a cheque
- getting a banker’s draft
- ordering duplicate statements
- getting copies of paid cheques
- requesting a reference from the bank
- Special presentation of a cheque (finding out quickly if the cheque will be paid).
These are usually between £3 and £30 – it varies from bank to bank. But it’s worth checking what these fees are before you open an account.
Banks have to publish a full list of their fees – and you should be able to find it on their website.
The fees can change, but your bank must give you notice.
Your bank or building society will tell you about their fees when you open your account.
If there’s any change to the fees or terms and conditions of running your current or payment account, they have to tell you well in advance. This is usually two months.
This notice period doesn’t apply to all saving accounts or overdraft changes.
If you have a problem with fees and charges, talk to your bank.
If you think the bank has got it wrong
Give them a chance to put it right before you complain.
If you think the bank has charged you correctly but you don’t think you should pay
It’s still worth asking them to waive the charge. If you’re not satisfied with their response, you can make a formal complaint.
Make a note of everyone you speak to and what they say. Also make a note of the dates and times of all your calls.
Put your complaint in writing. Mark your letter as a ‘complaint’ and make it clear what you’re complaining about and what you would like done. Include your account number and sort code. And provide any letters, papers or statements that explain the problem.
Download our template letter for complaining to your bank or building society (DOC, 25KB)
Read about How to reclaim unfair bank charges
If you’re still not satisfied, you can complain to the Financial Ombudsman Service.