Santander customers will be made to pay a higher price for going overdrawn after the bank announced plans to increase fees and interest rates across its current account range.
The bank is doubling the daily arranged overdraft fee it charges on all accounts other than its Zero Account from £0.50 to £1, from 16 March 2012.
Santander has also raised the fee cap for its Preferred Overdraft Rate Account from 15 to 20 days per month, meaning that you could pay up to £20 per month if you are using an overdraft facility for an extended period.
The Preferred Overdraft Rate Account has also been renamed the Everyday Current Account.
Interest rates also rise
Zero Account customers are not completely unaffected by the changes as Santander will hike the interest rate on its arranged and unarranged overdrafts up from 12.9% to 18.9% EAR (variable) from 16 April.
From 20 December 2011, Santander did at least stop charging a daily fee for customers that were overdrawn by £12 or less, using an arranged or unarranged facility.
Santander is heavily marketing its current accounts to new customers at the moment with attractive headline rates and free overdraft facilities available for the first twelve months.
Be prepared to switch
Matt Woodington, Which? analyst, said of the changes: ‘It is existing customers that will be charged more, highlighting the importance of regularly shopping around for the best bank account and being willing to switch where necessary.
‘This can ensure that you receive the best interest rates for your savings, incur lower charges if you do need to use your overdraft and also benefit from the switching incentives that banks often offer.’
• Authorised overdrafts – find the Which? Best Rate bank accounts for authorised overdrafts
• Overdraft charges – join the Which? campaign to ensure fair charging by banks
• Unhappy with your bank? – here’s how to switch to a bank account that meets your requirements