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Co-op scraps overdraft interest for three months

Consumers get relief for first quarter of 2012

Co-operative Finance logo

The Co-operative Bank has announced that it won’t charge authorised overdraft interest on most current accounts for the first three months of 2012

The Co-operative Bank will not be charging interest on authorised overdrafts for the first three months of 2012, the mutual announced today. 

On a £2,000 overdraft, the Co-op says that consumers will be able to save £74.22 over the three month period, while someone with a £1,000 overdraft will save £37.11 in interest payments.

The bank stated that it wanted to help consumers ease the pain of post-Christmas debt. Robin Taylor, head of banking, said: ‘In these difficult economic times, we want to offer a helping hand to those customers who may be struggling financially, and give some additional support to those whose finances may be stretched after the festive period.  

‘This move again highlights how we are looking to bring some much needed competition to the high street, by providing customers with a genuine alternative to the big five banks.’

The deal will not be available on Cashminder and Student accounts, Business banking and Corporate banking current accounts.

Co-op to increase its high street presence

The moves comes after the Co-operative Bank was named in December 2011 as the preferred bidder for over 620 Lloyds branches, having already increased its high street presence significantly following the takeover of Britannia Building Society. 

It is the top-scoring high street bank for customer satisfaction and is a Which? Recommended Provider for current accounts.

Increased competition

The emergence of the Co-op as a significant challenger to bigger high street banks was welcomed by Which? chief executive, Peter Vicary-Smith, who said: ‘If people are to get a better deal from their banks we need greater competition, which means an effective challenger on the high street. 

‘People tell us they like the Co-operative Bank and we think they can teach the other banks a lesson in good customer service.’

More on this… 

  • Co-op to take over Lloyds branches – what the move will mean for the high street
  • Finding the best current account – get to grips with the essentials of switching bank account
  • 10 ways to get out of debt in 2012 – if you’re always battling your overdraft
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