Current Accounts

Guide: Personal Finance

Type of Saver

What type of saver are you?

Type 1: The disciplined saver – you manage your finances carefully and never become overdrawn

If you have a good handle on your finances, good for you. You probably don’t need to worry about extra banking facilities such as interest free overdrafts, but it can cost to ignore these entirely. Sometimes unexpected expenses can be a real setback, and if, for example, your boiler breaks down you don’t want to be stuck paying overdraft interest of up to 30% to cover the cost.

Type 2: The just barely there saver – you’ve got just enough cash to cover your key monthly expenses, but sometimes need to become overdrawn.

Like the rest of us, sometimes money can be tight and it helps to have a current account that understands this. Look for an account that offers a free buffer zone plus a sensible interest rate on any additional overdraft that you use.

Type 3: The living beyond your means saver – each month the money you earn doesn’t quite cover your monthly expenses.

Whether you’re struggling to pay off a debt, or quite simply just cannot afford your current lifestyle, it helps to have a current account that is flexible. Look for an account with a good overdraft facility. But beware - banks will often allow you to go overdrawn on your current account and you will be charged an authorised overdraft rate. If you remain within your authorised overdraft limit, you will pay the authorised rate. However, if you have not arranged an overdraft structure/facility or just exceed your authorised limit, you will be charged interest at the unauthorised rate, a lot higher. You may also be charged a fee for being overdrawn. Check what you are charged for going overdrawn on your current account.

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