A budget account is an account set up for paying bills. You pay in a certain amount each month and get an overdraft limit, which is a few times the amount you pay in each month. You'll normally have to pay a fee for the account and you'll be charged interest on the amount you're overdrawn.
Key pros and cons of budget accounts
pros
- It's good to help spread the cost of bills.
- All your bills come out of the one account - so it's easy to keep track of your finances.
cons
- It can be expensive to run. If you only need occasional help, an overdraft may be a smarter way to borrow.
- This type of account is not widely available.
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