Santander Will Scrap Unarranged Overdraft Fees for 4 Million Customers
- Removing or reducing fees depending on the account
- Benefits will affect 4 million customers
- Change will kick in on the 10th July 2019 so customers can review accounts beforehand
- Some customers will end up paying MORE
Santander is planning on scrapping penalties for when you accidentally go overdrawn, starting from the 10th July 2018.
If you have a 123 Current Account, a 123 Lite Current Account, or a Select and Private current account, you will no longer be charged if you go over your arranged overdraft limit.
The Everyday Current Account and Student Accounts will still have these fees- but the monthly cap on them is being cut from £95 to £50.
This monthly cap includes all unarranged overdraft fees, including paid and unpaid item fees.
Customers will be notified in February by Santander about what changes will affect them, and will be able to review their options before the the changes come into force in July.
Reza Attar-Zadeh, Head of Customer Proposition and Experience at Santander UK, said, “These changes mean four million adult current account customers will benefit from no unarranged overdraft fees on their accounts.
“On other accounts, the maximum unarranged fess a customer could pay each month will be almost halved and customers will be automatically registered for unarranged overdraft alerts to help prevent such fees.”
However, not all customers will benefit from these changes- a proportion will pay a higher total in overdraft fees.
The monthly fee cap will only apply to unarranged overdraft fees, whereas in the past it applied to both arranged and unarranged.
What’s the difference between arranged and unarranged overdrafts?
Arranged overdrafts will have been authorised by your bank or building society.
It allows you to borrow money from the bank once your balance hits zero, but up to an agreed limit, and this can be paid off at a later date.
There will often be fees or interest as part of this.
Unarranged overdrafts happen when you go overdrawn, either when your balance hits zero or past your overdraft limit, and haven’t requested the money in advance.
This will often come with a hefty penalty fee that can escalate quickly.
It may be best to check out what other options there are for banking- changing banks or utilities can be an easy way to save money.
Who needs to know this? Pass it on