Santander to restructure overdraft charging
As previously announced in June 2010, Santander is to restructure its overdraft charges and is moving to a daily fee arrangement, aligning overdraft charges with the former Alliance & Leicester daily fee charging model.
From 16 March 2011 there will be three tiers of charges, rewarding loyal customer relationships with Santander.
1. The Santander Zero Current Account, which rewards those customers with a mortgage, investment or £10,000 of savings with Santander with a fee-free overdraft - and charges a competitive rate of 12.9 per cent EAR on any debt
2. A new preferential daily fees charging structure for current account customers who have their main banking relationship with Santander (in other words, they pay in a minimum of £1,000 a month) and those with added value accounts (for example the Santander Reward and Premium accounts)
3. A new daily fees charging structure for those who don't have their main banking relationship with Santander, and haven't chosen an added value account.
The daily fee structure being introduced by Santander is one of the most competitive in the current accounts market.
Nici Audhlam-Gardiner, Director of Banking, Santander UK, said: "Quite simply, people want to know how and why they are being charged for their overdrafts. By introducing a clear, transparent and competitive fee structure we expect our customers will have a better understanding of how overdraft charging works and find it easier to manage their bank account."
Arranged overdrafts on the student accounts and Santander Premium Current Account will be interest and charge free. This means that as long as these customers arrange their overdraft in advance with Santander they will never be charged for going overdrawn.
New accounts to be launched
Additionally, Santander is to launch a new current account in 2011 for people who use Santander as their main bank, which will offer a fee-free arranged overdraft for the first 12 months for switchers. After this first year arranged overdrafts will be charged at the preferential daily overdraft fees rate.
The new account will be available to new customers, existing Santander customers and those who have Alliance & Leicester accounts and wish to upgrade. Further details of the new account will be announced in the first quarter of 2011.
Santander is also to launch a new account for people who use Santander as their secondary bank and further details on this will be announced in the first quarter of 2011.
Nici Audhlam-Gardiner, Director of Banking, Santander UK, added: "Research among bank customers shows the majority of current account customers agree banks should explain account fees clearly and that daily charging is more transparent.
"We also think it's important to reward customers who choose Santander as their main financial provider, which means loyal customers get even more competitive terms for their overdrafts. Basically, the more our customers do business with us, the more we will reward them."