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Nationwide Increasing Authorised Overdraft Rates by Around 1/3 from 1st June 2008
bristolleedsfan
Posts: 12,655 Forumite
Nationwide fees move set to spark fury
10/05/2008
10/05/2008
Millions of Nationwide customers have been shortchanged by a shake-up of its current accounts.
The UK's biggest building society says it's putting up overdraft charges by nearly a third and cutting the rate of interest paid.
Nationwide is the first major provider to announce such a move on standard accounts since the start of a legal battle over rip-off overdraft fees earlier this year.
If banks lose, they will have to slash their charges. Experts predict other banks and building societies will follow Nationwide's lead to recoup potential losses. Lloyds TSB, NatWest and RBS have also raised fees but only on packaged accounts held by fewer people.
The UK's biggest building society says it's putting up overdraft charges by nearly a third and cutting the rate of interest paid.
Nationwide is the first major provider to announce such a move on standard accounts since the start of a legal battle over rip-off overdraft fees earlier this year.
If banks lose, they will have to slash their charges. Experts predict other banks and building societies will follow Nationwide's lead to recoup potential losses. Lloyds TSB, NatWest and RBS have also raised fees but only on packaged accounts held by fewer people.
Nationwide is increasing the authorised overdraft rate on its Flex account - which has four million customers - from 9.9 to 12.9 per cent from June 1.
At the same time, it is dropping the interest paid on credit balances from a maximum 3.75 to 3.5 per cent.
It is also raising the minimum monthly deposit required from £1,000 to £1,500, which is a blow to customers on lower incomes who will see their interest rate cut from 3.75 to two per cent.
Nationwide's Charlotte Sjoberg denied the move was linked to the unauthorised overdraft fees battle. "Our rates are still lower than our competitors," she insisted.
But Michelle Slade, of Moneyfacts, said: "Nationwide is penalising customers who arranged their overdraft first."
At the same time, it is dropping the interest paid on credit balances from a maximum 3.75 to 3.5 per cent.
It is also raising the minimum monthly deposit required from £1,000 to £1,500, which is a blow to customers on lower incomes who will see their interest rate cut from 3.75 to two per cent.
Nationwide's Charlotte Sjoberg denied the move was linked to the unauthorised overdraft fees battle. "Our rates are still lower than our competitors," she insisted.
But Michelle Slade, of Moneyfacts, said: "Nationwide is penalising customers who arranged their overdraft first."
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Comments
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Wonderful. Another fallout for customers who never ever paid/reclaimed penalty charges. Of course, people like Martin never said this would happen but it has.0
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The laws of unintended consequences strikes again.0
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keeperbear wrote: »Wonderful. Another fallout for customers who never ever paid/reclaimed penalty charges. Of course, people like Martin never said this would happen but it has.
:money: Actually denied that it would happen due to in his words "competition" sadly:money: forgot that Banks/Building Societies can act as Cartels when they want to. _pale_
http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=441281&in_page_id=7
Worse could follow yet, Mr Beale was reported to have said before he even took the reins at Nationwide that if other Banks introduced charges for "everyday services" then Nationwide would follow.
http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=414717&in_page_id=3
http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=417624&in_page_id=7 0 -
Current accounts are not savings accounts.
Nationwide like many banks allows you to have an e-savings account where you can move your wages in when you get paid, and move out money just before your bills are due.I'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
Does the interest rate change each month if a different amount is paid in?
Or if you fail twice in 12 months to reach the minimum, do you earn the lower rate all year?0 -
Its per calender month.0
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I am a Nationwide customer and don't have a problem with this, it's still a reasonable rate and less than most credit cards. Unlike certain other posters, I'm quite happy to pay for the services that I use and don't expect others to have to pay inflated fees to subsidise me.0
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keeperbear wrote: »Wonderful. Another fallout for customers who never ever paid/reclaimed penalty charges. Of course, people like Martin never said this would happen but it has.
But thats ok - Martin has done very well out of the whole thing. look at the success of this website now.0 -
Still waiting for official notification from Nationwide on this...
Shouldn't organisations be made to tell customers in advance of such changes? Not everyone has access to the web or time to read all the info around.0 -
Interest rates changes and overdraft rates, 'no' - they only have to notify customers afterwards - other changes to terms and conditions, generally* 'yes'. The word 'notice' can refer to before or after an event - and when the Banking Code (and who is it that writes that, d'you think?) speaks of '30 days notice', that's what it means.Still waiting for official notification from Nationwide on this...
Shouldn't organisations be made to tell customers in advance of such changes? Not everyone has access to the web or time to read all the info around.
Another thing is the changes to the in-credit interest rate structure due from 1 August 2008. Now the financial press is reporting that Nationwide has 'announced' this change, but where do you find this 'announcement' even on Nationwide's media centre - Let along telling customers anything about it through direct communications?
*where they make an account term better (no 'detriment') they can do so without advanced notice.....under construction.... COVID is a [discontinued] scam0
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