UK: Unarranged overdraft fees scrapped by Santander

Santander has announced that from 10th July 2018 its current account customers will no longer face unarranged overdraft fees on current accounts with monthly fees.

Currently, current account holders who go into overdraft face a £6 a day unarranged overdraft fee. This fee will be completely removed from all 123 accounts along with Select and Private accounts. Those who go into an unarranged overdraft on the Everyday Current Account or any student accounts will still face overdraft fees, but the maximum monthly charge will be reduced from £95 to £50.

Those with the Basic Current Account will not be affected by these changes as these accounts already had no overdraft fees. Fees on arranged overdrafts will also be unchanged.

RFi Group data suggests these changes could help Santander attract more current account customers, with 11% of current account holders considering the fees and charges to be the most important factor when selecting a current account. This makes fees and charges the third most considered factor, behind only the online banking services (15%) and the interest rates (14%).

Santander will also begin sending automatic unarranged overdraft alerts to the customer who goes into their overdraft.

Santander claims that the new fee structure will benefit over 4 million customers, although 0.1% of its customers could end up paying higher total overdraft fees as the monthly fee cap will be removed from arranged overdrafts. Account holders will receive a notification of these changes through a letter

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