Spanish-owned bank Santander has announced a package of changes on overdraft fees coming to effect on 19 August, which will affect millions of customers in the UK.
The bank has removed the £20 ($34) per month cap on authorised overdraft fees for all its accounts. This fee is now £1 per day, meaning that customers could pay up to £31 per month.
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Also, the unauthorised overdraft usage fee has increased from £5 to £6 per day, and the current £100/month cap has been removed, affecting ‘Everyday’, ‘Premier’ and ‘Premier Direct’ account holders.
However, paid and unpaid transaction fees have been cut to zero from £5 and £10 respectively on the ‘123’ account, and to £10 from £25 on the three other accounts.
Monthly overdraft fee caps have remained unchanged at £95 a month for ‘123’ account holders and £150 a month for ‘Everyday’, ‘Premier’ and ‘Premier Direct’ customers.
The bank’s head of UK retail products, Reza Attar-Zedah, said: "We provide a range of services to help our customers manage their money more closely.
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By GlobalData"These include online and mobile banking, email and text alerts which can be set to warn of an overdraft or unpaid item, a £12 overdraft buffer, a grace period of until 4pm to clear an overdrawn balance, and 22 days’ notice of account charges."
Santander has stated it was writing to customers to let them know about the changes, which were "following recent competitor moves".
Barclays Bank earlier announced changes coming to effect on 16 June. The bank will no longer charge interests on overdrafts and, instead, will introduce daily fees from 75p a day – for planned overdrafts up to £1,000 – to £3 a day – for planned overdrafts over £2,000.
Barclays will reduce its unplanned overdraft fee cap (£5/day) to £35 per month, against £110 per month previously. Unpaid transactions will be limited at one per day, costing £8, while paid transaction will become free.
Other big British financial institutions’ unplanned overdraft fees include £5 to £10 per day for Lloyds and £6 per day for Royal Bank of Scotland (RBS). HSBC does not charge a ‘first informal overdraft in six months’ but charges for subsequent unplanned overdrafts at £25 each.
Related articles:
Barclays reduces overdraft fees on current accounts
HSBC to remove unpaid transaction fees on personal current accounts
