Bank Account Fees and Charges

Bank accounts can have fees and charges attached: either to keep the account open, or as a result of the way you’ve used the account. 

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.

Your bank will tell you if there is a charge, and how much, when you ask for any of these items.

Monthly Fees 

This is how much the bank charges each month for your access to the account and its perks.

Spending Abroad Charges 

Banks charge fees of up to 3% for some foreign transactions, such as using your debit card to:

• withdraw cash from cash machines, 
• make purchases while you’re abroad, 
• some might also add a currency conversion charge, but this depends on your card – some are much more travel-friendly. 

Cash Machine Charges 

In the UK, taking money out of a cash machine with your debit card is usually free.

However, some cash machines 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 or not. 

Using a credit card to take out cash comes with a large charge, and you pay interest from the date you withdraw the money. Some prepaid cards will also charge you a fee to withdraw money from cashpoint machines, so read the terms and conditions.

Direct Debit Charge 

If a Direct Debit or standing order is due to be paid and there’s not enough money in your account to cover it, the bank can refuse to make the payment and charge you.

This can be as much as £25 each time a payment is refused.

Overdraft Costs 

An overdraft is a way of borrowing money from your bank or building society, linked to your current account. It’s possible to take out more money than you have in your account, although your bank or building society will charge you:

• a high interest rate of up to 15-20% equivalent annual rate (EAR) or more,
• a daily, weekly, or monthly fee for the time you stay overdrawn,
• you might be charged for every cash withdrawal or cheque or card payment you make, even if the bank doesn’t allow the payment to go through. These fees can be £10-£25 for each transaction.

Overdraft fees can mount up quickly.

Monthly Maximum Charge (MMC)

Current accounts now have a Monthly Maximum Charge (MMC) in place, which is the maximum amount you’d pay each month in fees, charges, and interest on unarranged overdrafts. 

The MMC amount varies depending on the bank or building society, and which current account you have.