Santander ups overdraft charges
Millions of Santander customers will pay more to use their overdrafts when it ups its fees in August.
Customers with the 123, Everyday, Premier and Premier Direct current accounts will see the unauthorised overdraft usage fee increase from £5 to £6 per day.
The bank is also removing its authorised overdraft fee cap of £20 a month on these accounts and the current £100 a month cap on unauthorised usage fees on the Everyday, Premier and Premier Direct accounts.
Those who are in their overdrafts for fewer than 20 days a month will see no change at all, while those who are in their overdrafts for longer could face paying up to £31 a month.
The overall monthly fee cap for 123 customers will remain at £95 and £150 for the other account holders.
In better news, paid and unpaid transaction fees are being cut to nothing on the paid-for 123 account and to £10 from £25 on the Everyday, Premier and Premier Direct accounts.
The changes will come into force from August 19 and the bank is writing to customers to explain the changes.
Reza Attar-Zadeh, head of UK retail banking at Santander, said: "We are writing to customers, providing at least 60 days' notice, so that they are able to understand how they may be affected by the changes."
More attractive offers
According to money expert Andrew Hagger, there are a number of other, more attractive, accounts on the market for those who rely on their overdrafts to get through the month.
First Direct's 1st Account, for example, comes with the first £250 of the overdraft facility interest free. If you were to go £600 overdrawn for seven days each month for a year, you would pay just £12.81 in additional charges.
M&S Bank will give you the first £100 interest free, and then you'll pay at a rate of 15.9% EAR. Using the same figures as the First Direct example, you would be charged £18.30 over 12 months.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.