Most UK banks do not charge monthly fees for a basic current account, but charges appear when you go overdrawn or use paid extras
The majority of UK banks offer free current accounts with no monthly fee. However, "free" does not mean consequence-free. You will pay charges if you go into overdraft without an agreed arrangement, use certain services like international transfers, or choose a premium account tier. Some banks charge for overdraft use even when you have arranged it in advance, while others charge only for unauthorised overdrafts. The fees vary significantly between banks and between account types at the same bank.
The key distinction is between authorised overdrafts (where the bank has agreed you can borrow) and unauthorised overdrafts (where you spend money you do not have without permission). Unauthorised overdrafts almost always carry charges. Authorised overdrafts may or may not, depending on your bank and the specific terms of your overdraft agreement.
Key Takeaways
- Most UK banks offer free current accounts with no monthly subscription, but overdraft charges and fees for specific services are common.
- Unauthorised overdrafts — spending beyond your limit without the bank's permission — trigger charges at every major UK bank.
- Authorised overdraft charges vary: some banks charge interest or fees even on agreed overdrafts, while others charge only on unauthorised use.
- Premium or packaged accounts often include perks like travel insurance or breakdown cover but charge a monthly fee of £10 to £25.
- International transfers, cheque deposits, and paper statements may incur charges depending on your bank and account type.
Overdraft charges: authorised versus unauthorised
An authorised overdraft is an agreed borrowing limit. You and your bank have set a maximum amount you can spend beyond your balance. If you stay within that limit, you may still be charged, but the charge is predictable because you have consented to the terms. Most major banks now charge interest on authorised overdrafts rather than flat fees, typically between 19% and 40% annual percentage rate (APR), though the exact rate depends on your bank and creditworthiness.
An unauthorised overdraft occurs when you spend beyond your agreed limit or when you have no overdraft arrangement at all. Banks charge for this because you have used credit without permission. Charges are steep: typically £5 to £35 per transaction or per day, depending on the bank. Some banks charge a single fee per month if you go unauthorised at any point; others charge per transaction. Barclays, for example, charges £5 per transaction when unauthorised. Lloyds charges £6 per day. These charges can accumulate quickly if you remain overdrawn for several days.
From January 2020, the Financial Conduct Authority (FCA) capped unauthorised overdraft charges at 39.9% APR, which brought down some of the highest fees. However, this does not mean overdrafts are cheap — it means they cannot be more expensive than a typical credit card.
Monthly fees on standard current accounts
Standard current accounts at the major UK banks — Barclays, HSBC, Lloyds, Natwest, Santander, and others — charge no monthly fee. You can open and maintain a current account at no cost. This applies to basic accounts designed for everyday banking: paying bills, receiving wages, and withdrawing cash.
However, some banks have begun charging for paper statements or cheque books. Natwest, for instance, charges £1 per paper statement if you request one, though online statements remain free. Cheque books are free at most banks but may incur a charge if you request multiple books in a short period. These are minor charges compared to overdraft fees, but they are worth checking in your bank's terms.
Premium and packaged accounts
Many UK banks offer packaged or premium current accounts that charge a monthly fee in exchange for added benefits. These typically cost between £10 and £25 per month. Benefits often include travel insurance, breakdown cover, mobile phone insurance, or preferential overdraft rates. Barclays Platinum, for example, costs £25 per month and includes travel insurance and breakdown cover. HSBC Premier is free if you maintain a minimum balance but charges £25 per month otherwise.
The value of these accounts depends on whether you would otherwise buy the insurance separately. If you already pay for travel insurance or breakdown cover, a packaged account might save you money. If you would not use the benefits, the monthly fee is wasted. Check what is included before upgrading, and remember that you can downgrade to a free account at any time if the benefits do not justify the cost.
Charges for specific services and transactions
Beyond overdrafts and monthly fees, UK banks charge for certain services. International transfers typically cost £10 to £40 depending on the destination and your bank. Some banks charge for sending money abroad; others charge only if you receive money from abroad. HSBC and Barclays both charge for outbound international transfers, though the fee varies by country.
Paying bills by cheque still exists in the UK, though it is declining. Most banks charge nothing to write or deposit a cheque, but some charge if you request a replacement cheque book or if you deposit a cheque from a non-UK bank. Santander, for example, charges £15 to deposit a foreign cheque.
Requesting a bank statement or proof of funds (often needed for visa applications or mortgage applications) is free online but may cost £5 to £10 if you request a printed copy. Some banks now charge for paper statements as standard; others charge only if you request multiple copies.
How to find your bank's specific charges
Every UK bank publishes a tariff of charges document, usually available on their website under "Charges" or "Fees and Charges". This document lists every fee the bank charges, including overdraft rates, monthly fees, and transaction charges. You can also request a copy by phone or in branch.
If you are considering switching banks, use the comparison tool on the Financial Conduct Authority website or a third-party comparison site like MoneySuperMarket or Confused.com. These tools let you filter by account type and see which banks charge for overdrafts and which do not. Some banks, like Starling and Revolut, charge no overdraft fees at all if you stay within an agreed limit, though they may charge for going unauthorised.
Your bank must also provide you with a Key Facts About Your Account document when you open an account or switch. This summarises the main charges and features. Read this before signing up, and keep it for reference.
What happens if you cannot afford overdraft charges
If overdraft charges have built up and you cannot pay them, contact your bank immediately. Many banks have hardship policies and may reduce or waive charges if you are in financial difficulty. The FCA expects banks to treat customers fairly, and this includes considering whether charges are proportionate to your circumstances.
You can also complain to your bank's complaints department if you believe charges are unfair or if the bank did not make the terms clear. If your complaint is not resolved within eight weeks, you can escalate to the Financial Ombudsman Service, which is free and independent. The Ombudsman has the power to order the bank to refund charges.
Frequently Asked Questions
Do I have to pay overdraft charges if I have an agreed overdraft?
Not necessarily. Some banks charge interest on authorised overdrafts; others do not. It depends on your bank and the terms of your overdraft agreement. Check your bank's tariff of charges or contact them directly to find out whether your overdraft is interest-free or charged at a specific rate.
Can I switch banks to avoid overdraft charges?
Yes. Some banks, including Starling and Revolut, offer current accounts with no overdraft charges on authorised borrowing. However, they may charge for unauthorised overdrafts. Compare banks using the FCA tool or a comparison website to find one that matches your needs. Switching is free and usually takes 7 working days under the Current Account Switch Service.
What is the difference between APR and a flat overdraft fee?
APR (annual percentage rate) is interest charged as a percentage of the amount you borrow, calculated daily. A flat fee is a fixed charge per transaction or per day. Most UK banks now use APR for authorised overdrafts. Unauthorised overdrafts may use either method, though flat fees per transaction are common.
Will my bank charge me for going overdrawn by a few pounds?
If you go unauthorised by even a small amount, you will be charged. However, some banks offer a small buffer — for example, Barclays allows you to go £5 overdrawn without charge. Check your bank's specific terms. If you have an authorised overdraft, small amounts within your limit will not trigger additional charges beyond the agreed interest rate.
Can I get overdraft charges refunded?
You can request a refund if you believe the charges are unfair or if the bank did not explain the terms clearly. Contact your bank's complaints team. If they refuse, you can escalate to the Financial Ombudsman Service within six years of the charge being applied. The Ombudsman has refunded overdraft charges in cases where banks failed to treat customers fairly.