Santander scraps unarranged overdraft fees
The major lender announced in January that 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 from the first full monthly statement period from today onwards.
However, where unarranged overdraft fees still apply on fee-free accounts, 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 – there are no overdraft fees or monthly account fees.
The move is set to benefit four million adult current account holders, but Santander said 0.1% (approximately 3,000 customers) 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 changes:
1 – No changes will be made to the Basic Current Account
2 – Students can get up to £2,000 fee free arranged overdrafts
*Overdraft cap changes effective from the first full 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 our four million 123, Select and Private current account customers will no longer incur unarranged overdraft fees. For other customers the cap on these fees will be almost halved ensuring that all our current account customers can benefit from overdraft caps that are among the lowest in the market.”