Santander offers ‘fee-free' buffer on overdrafts and daily ‘grace period'
Santander is introducing a number of changes to its overdraft facilities designed to support its customers in managing their money. The bank has introduced a ‘buffer' on overdrafts so if customers go overdrawn by £12 or less, they won't be charged overdraft fees. In addition the bank is giving its customers a ‘grace period' each day so if they use their overdraft they have until 4pm to credit their account with cleared funds to reduce or avoid paying overdraft fees.
Santander recently launched a new text message and email alert service which enables customers to stay informed about their account balance and providing prompts on when their balance gets below a defined amount. This week Santander also launched a new mobile banking service for internet-enabled mobile phones and handheld devices, and an iPhone/iPad app to give customers greater control of their finances while on the move.
Liz Chang, Director of Banking at Santander, commented: "We are committed to helping our customers manage their finances more closely and the clear and transparent changes we are making demonstrate this.
"By charging no fees on overdrafts of £12 or less and giving customers time each day to return their account to an arranged overdrawn or credit position, we are helping them to manage those occasions where they are only a few pounds overdrawn. In addition, by introducing a new text message and email alert service, as well as mobile banking with iPhone/iPad apps, we are providing our customers with greater account control."
Alongside these improvements Santander is also making some changes to its overdraft fees. The daily arranged overdraft fee is increasing from 50p to £1 on all eligible accounts, from 16 March 2012. However - unlike some banks which charge a daily fee - this is capped at 10 days per statement period for Santander's Preferred Current Account and 20 days per statement period for the Everyday Current Account. In addition the debit interest rate charged on overdrafts on the Zero Current Account is rising from 13.9 per cent EAR to 18.9 per cent. Santander's fees remain competitive and in line with the market.
Santander currently offers three main types of current account. The Preferred Current Account requires a customer to deposit £1,000 a month and pays an in-credit interest rate of 5 per cent on balances up to £2,500. The Everyday Account has no monthly deposit requirement and pays no in-credit interest. These two accounts operate a daily fee structure for overdrafts. The Zero Account is a no fees account and applies debit interest on overdrafts.
Santander has just over 5 million active current account customers with approximately 20 per cent using an overdraft regularly.