Santander to scrap unarranged overdraft fees
The major lender has announced it will remove or reduce unarranged overdraft fees from 10 July 2018 for those customers who currently pay monthly account fees.
The unarranged overdraft fees – £6 a day in each monthly statement period – will be removed completely from the 123 Current Account, the 123 Lite Current Account, as well as Select and Private current accounts.
However, where unarranged overdraft fees still apply, such as on the Everyday Current Account and the student range of accounts, the maximum monthly charge (MMC) will be cut from £95 to £50. The cap will apply to all unarranged overdraft fees, including paid and unpaid item fees.
Arranged overdraft fees are not included, however students receive a fee-free arranged overdraft.
There’s no change to Santander’s Basic Current Account – it has no overdraft fees and no monthly account fee.
Santander said customers will receive a letter informing them of the changes and from 2 February, they’ll be automatically registered for free unarranged overdraft alerts.
This move is set to benefit four million adult current account holders, but Santander said 0.1% could pay higher total overdraft fees as the monthly fee cap will only apply to unarranged overdraft fees where previously it applied to both arranged and unarranged combined.
Its £12 overdraft usage fee buffer will also remain and Santander confirms customers will still be able to credit their accounts by 4pm to avoid overdraft fees.
Arranged overdraft fees for adult current accounts are £1 per day for usage up to £1,999, £2 per day for usage from £2,000 to £2,999.99 and £3 per day for £3,000 or more.
The table below shows the current charges and those from 10 July:
1 – No changes will be made to the Basic Current Account
2 – Students can get up to £2,000 fee free arranged overdrafts
*Overdraft cao changes effective from the first fill monthly statement period starting on or after 10 July 2018.
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 fees a customer could pay each month will be almost halved and customers will be automatically registered for unarranged overdraft alerts to help them minimise or prevent such fees.
“Our customers can be confident that we’re here to help: we have specialist support teams in place and a range of free tools and services, such as mobile banking and account alerts, so our customers can stay on top of their money.”