How much will it cost if you want to go overdrawn without asking?

0
0
0
1

If you have a current account, it’s obviously best if you can stay in credit the whole time. But if you go overdrawn without permission, be aware that it can be very expensive indeed. Today, the Financial Conduct Authority says charges the current system can’t go on and charges can be very high and hard to understand.

Unauthorised overdraft charges

In all cases I’ve looked at the bank’s standard non-fee charging account.
Bank of Scotland overdraft interest rates and fees

Monthly fee: If you go overdrawn by more than £10 at any time in the month, you’ll be charged a £6 monthly usage fee. From November there will be no fee.

Daily fee: You’ll also get charged a daily fee that’s tiered according to how much you’re overdrawn. If you go overdrawn by less than £10, you’ll get charged nothing, if it’s by £10-£24.99, you’ll get charged £5 a day and if you go overdrawn by £25, you’ll get charged £10 a day. You’ll get charged a maximum of eight daily fees in any one monthly billing period (so up to £80). From November there will be no daily fee.

Interest: You’ll also be charged interest. The rate you pay will depend on the account you have. For example, it could be 19.89% if you have a classic account. From November you’ll be charged no interest.

SAVVY TIP: Although Bank of Scotland is scrapping all fees for unarranged overdrafts, it’s bringing in a daily fee of 1p for every £7 you’re overdrawn by on arranged overdrafts from November.

Barclays current account overdraft fees

SAVVY TIP: Barclays says that if you’re switching from another bank it may be able to match your old planned overdraft and offer it interest free for the first 12 months. Subject to terms and conditions.

Returned/paid item fees: If you make a payment on something like a direct debit or standing order and it’s unpaid, you’ll be charged £8 for each payment that’s bounced.

SAVVY TIP There’s an upper limit of one £8  charge per day.

Halifax rates and fees

Overdraft fees: You’ll be charged £5 a day if you have an unauthorised overdraft, except on the current account with control (which costs £10 a month and is designed to help you not go overdrawn). In that case, you pay £1 a day. If you pay the higher £5 daily fee and are overdrawn for a month, the maximum you’ll be charged in any month is £100. From November there will be no fee.

Unpaid item fees. There is no separate unpaid item fee.

SAVVY TIP: Although Halifax bank is scrapping all fees for unarranged overdrafts, it’s bringing in a daily fee of 1p for every £7 you’re overdrawn by on arranged overdrafts from November.

HSBC overdraft charges.

Overdraft fee: There’s a maximum limit on the overdraft charges of £80 a month. This will be charged if you are overdrawn for 21 days in a month or more. If you’re overdrawn for 10 days, you’ll pay £50.

Returned/paid item fees: If you make a payment of up to £10, you won’t get charged anything, if it’s between £10 and £15, you’ll get charged £10 and if it’s over £25, you’ll get charged £25.

Lloyds Classic Account

Monthly fee: If you go overdrawn by more than £10 at any time in the month, you’ll be charged a £6 monthly usage fee. From November, no monthly fee. However, payments may not be made if you don’t have the money in your account.

Daily fee: You’ll be charged £5 a day if you have an unauthorised overdraft, except on the current account with control (which costs £10 a month and is designed to help you not go overdrawn). In that case, you pay £1 a day. If you pay the higher £5 daily fee and are overdrawn for a month, the maximum you’ll be charged in any month is £80. From November there will be no daily fee.

Interest: You’ll also be charged interest. The rate you pay will depend on the account you have. For example, it could be 19.89% if you have a classic account. From November you’ll be charged no interest. From November you’ll be charged no interest.

SAVVY TIP: Although Lloyds bank is scrapping all fees for unarranged overdrafts, it’s bringing in a daily fee of 1p for every £7 you’re overdrawn by on arranged overdrafts from November.

NatWest overdraft fees and charges. These charges apply to anyone who’s opened an account after July 4th 2012, or anyone who’s already got an account who’s been told their terms and conditions will change.

Unarranged overdraft fee: £6 a day for every day you are overdrawn by more than £6. There is a maximum charge of £90 in any month.

Unpaid item fee: £6 for each item that’s returned unpaid. There’s a maximum limit of £60 per month on this.

SAVVY TIP: You won’t be charged interest on your unarranged overdraft, but the £6 charges can quickly mount up and you may be charged two fees for one transaction. So, for example, if you don’t have enough money in your account for a payment an ‘unpaid item fee’ of £6 would be generated and if this makes your account overdrawn, you’ll also be charged an unauthorised borrowing fee of £6. You’ll get charged this fee at weekends and Bank Holidays as well as working days.

RBS overdraft fees and charges. These charges apply to anyone who’s opened an account after July 4th 2011, or anyone who’s already got an account who’s been told their terms and conditions will change.

Unarranged overdraft fee: £6 a day for every day you are overdrawn by more than £6. There is a cap of £90 a month on the charges..

Unpaid item fee: £6 for each item that’s returned unpaid. There’s a maximum limit of £60 per month on this.

SAVVY TIP: You won’t be charged interest on your unarranged overdraft, but the £6 charges can quickly mount up and you may be charged two fees for one transaction. So, for example, if you don’t have enough money in your account for a payment an ‘unpaid item fee’ of £6 would be generated and if this makes your account overdrawn, you’ll also be charged an unauthorised borrowing fee of £6. You’ll get charged this fee at weekends and Bank Holidays as well as working days.

Santander. I’ve looked at the charges for its 123 Current account. I know this one charges, whereas the other accounts I’ve looked at are free, but it’s the account that many people switched to.

Daily unarranged overdraft fee: You’ll be charged £6 a day for every that you’re overdrawn. You won’t pay more than £95 in unarranged overdraft fees in any month.

Related articles:

Incentives to switch banks – switch banks and get £100

Basic bank accounts if you have a poor credit rating – which banks offer them?

Bank frauds and scams to avoid – how to reduce the risks of being a fraud victim

SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.