Overdraft rates are second only to credit card interest rates when it comes to bad value in banking. We have some of the highest overdraft rates in Europe.
A recent survey, commissioned by the European Commission, found that Irish current accounts are less transparent than the European average, with more complex pricing structures.

Rates
AIB has the highest overdraft rate at 14.79%, according to the Financial Regulator. That is almost 15 times the European Central Bank rate. BoI – 13.7%; Ulster – 13.55%, Permanent TSB – 13.6%.

Surcharge rate
But it gets worse because if you go overdraft without having an overdraft facility in place there is an additional surcharge. AIB has a surcharge of 9%. This means an unauthorised overdraft with AIB will cost a whopping 14.79% + 12% or almost 27%. You would get a better rate off a moneylender.
So, if you had an unauthorised overdraft of €5,000 with AIB for a year it cost you €1,350 in interest alone.

Set up fee
To set up an authorised overdraft with AIB will cost you €25.39 initially, with the charge recurring every year. In contrast, Halifax has a zero set up fee.

Referral item
Any debit or cheques that cause an account to exceed its approved limit is/are subject to a referral item fee, per item.
Most banks charge €4.44 each time you don't have enough money in your account to cover a cheque.
Bank of Ireland does not charge a referral item fee but it will charge you €12.70 for a bounced cheque.
Postbank has not referral item fee.

Solutions/tips
Get a term loan or a credit union loan. Term loan for €20,000 – AIB 10%, Ulster 9.9%. Typical credit union loan between 6% and 12%
Alternatively, pay your bills directly. An Post BillPay allows you to pay 120 different types of bills in 1,200 post offices.
Internet current accounts are cheaper than traditional current accounts.
For more information see the Financial Regulator’s website, www.itsyourmoney.ie.