An overdraft is a credit facility that is attached to your current account.  It allows you to withdraw more money from your account than you actually have, which is really useful for helping you out when facing those unexpected aaargh-the-car-broke moments.

You can use your overdraft as much as you need each month, all of the agreed amount or not at all. The choice is yours as your overdraft amount remains available even when you are not using it and you only pay interest on the amount you use.

This example will help you understand how it works: say you earn R10 000.00 each month, which is deposited into your bank account, and you’ve got a R2 000.00 overdraft facility. This means that you can withdraw up to R12 000.00 that month.

There is no minimum monthly repayment required on your overdraft as long as

• you stay within your agreed limit and
• your salary, at least, is deposited into the account you’re using the overdraft facility on every month.

The amount you qualify for depends on your income and your credit risk, but there is maximum limit of R70 000.00.

You can take up a limit up to R500 and not pay the Initiation fee and the monthly service fee

This equates to a R473 p.a. saving.

The costs

Interest is calculated on your daily outstanding balance but charged to your account once per month.

You will pay a once-off initiation fee and a monthly service fee for limits above R500.