With the Supreme Court ruling in the bank charges court case due next Wednesday banks are finally starting to understand that they cannot continue to charge customers up to £35 every time they go a few pennies over their overdraft limit.
Santander, which includes Abbey, Alliance & Leicester and Bradford & Bingley, has become the first bank to offer a fee-free current account in a clever move that has helped it hit the headlines in the national newspapers.
The Santander Zero, as it will be known, will not charge anything for exceeding an overdraft limit and will charge an annual rate of 12.9 per cent on borrowing – which is the lowest overdraft rate around
And it’s not only aimed at those people who constantly go over their limit. Customers who credit the account with a minimum of £1,000 a month will qualify for a 6 per cent gross interest rate on credit balances for a year.
Read Sharlene Goff’s news article for more information on this account.
It’s an excellent offer but what’s the catch? To take out one of these accounts you need to have a Santander mortgage or be in the process of taking one out. This means it will give existing customers an incentive to remain with Santander for their borrowings. So any hit that Santander takes on charges they can make up with the slightly higher interest rates charged on their mortgage deals.
Lucy Warwick-Ching
Matthew Vincent
Alice Ross
Ellen Kelleher
Steve Lodge
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Jonathan Eley