MSE News: NatWest and RBS to charge more overdraft customers

Gordon_the_Moron

jamesd wrote: »

This isn't instead of interest. It's this plus interest.

In this case yes, in most the fees replace interest (Halifax and Santander being the two examples that spring to mind, think there are others too now, Lloyds??? Nationwide Flexplus I think)

Charge the person overdrawn the most the lowest and sting the person just dipping into the red the most, makes no sense :cool:

jamesd

Gordon_the_Moron wrote: »

Charge the person overdrawn the most the lowest and sting the person just dipping into the red the most, makes no sense :cool:

Unlike some others this charge doesn't do what I think you meant. A person who used a £1,000 overdraft for a month would get charged the £6 fee and £14.95 interest, much more in money terms than someone who only used the overdraft a little for a short time.

Where it gets silly is for someone overdrawn by £100 of chargeable balance for a day, who pays an effective interest rate of 1724411147% plus the calculated interest. Higher still if the amount borrowed is lower.

Makeandsave

This is the kick up the bum i need to get rid of my OD with RBS! Should save myself about £8 in interest a month and the new £6 fee. Might even downgrade my account and save £10 a month.

bonthrm

Your news article states;

"Customers with the paid-for Select Platinum, Advantage and Royalties Gold and Black accounts will escape these charges, as well as those with graduate and student accounts."

This is untrue I have one of these accounts and I have received a letter informing me of these changes and their online literature for these accounts states the new charges and confirms no free overdraft. So we go from £100 free overdraft to £10 free over draft then £6 plus 19.89% interest.

I've switched to Nationwide they have similar account same £10 a month fee as the RBS Select Account but get much better benefits in my opinion, plus a £100 free overdraft then 50p a day for over £100. Perfect for me as I only rarely use the OD and never by more than £100

chambta

bonthrm wrote: »

Your news article states;

"Customers with the paid-for Select Platinum, Advantage and Royalties Gold and Black accounts will escape these charges, as well as those with graduate and student accounts."

This is untrue I have one of these accounts and I have received a letter informing me of these changes and their online literature for these accounts states the new charges and confirms no free overdraft. So we go from £100 free overdraft to £10 free over draft then £6 plus 19.89% interest.

I've switched to Nationwide they have similar account same £10 a month fee as the RBS Select Account but get much better benefits in my opinion, plus a £100 free overdraft then 50p a day for over £100. Perfect for me as I only rarely use the OD and never by more than £100

The article was correct. Everyone will get the letter I suspect regardless of account type held.

phona

chambta wrote: »

Everyone will get the letter I suspect regardless of account type held.

That does seem to be the case. I have a student account and got an email about the changes this morning. It's pretty clear that it doesn't affect me though:

We are required to tell you about some changes we are making to our Terms from 12 July 2013. These are in relation to overdraft charges across our range of current accounts. However, as you have a Student Royalties Account, these changes will not directly affect you.

bonthrm

chambta wrote: »

The article was correct. Everyone will get the letter I suspect regardless of account type held.

No it's not correct my letter clearly states my account will have these new charges applied. It says;

We'd like to let you know about some changes we are making to the overdraft charges on all our current accounts from 12 July 2013.

You'll find a summary and table below, highlighting the key changes for your Select Silver Account. We've also provided some useful tools and tips to help you avoid or minimise overdraft charges.

When you use your arranged overdraft There will be a new fee of £6 per monthly charging period. You will only pay this fee, plus interest, when you're more than £10 overdrawn.

If you exceed your arranged overdraft the maximum amount you could be charged in daily unarranged overdraft fees has been reduced to £90 per monthly charging period.

What you pay now
Arranged Overdrafts What we charge Interest (19.89% EAR)
When we charge it When you're more than £100 overdrawn What we will charge you from 12 July 2012
Arranged Overdrafts What we charge £6 + Interest (19.89% EAR)
When we charge it When you're more than £10 overdrawn

If you have any questions, please get in touch.

Yours sincerely,

Simon Turner Head of Current Accounts

Southernman

That is correct for the Silver though.

Sammie20131

Well this is annoying... I was earning a petty bit of interest from being £100 overdrawn for the last year. Same month Halifax informed me that I had to set up a standing order to benefit from their £5.00 monthly reward. Paycut of over £5 per month. Bummer!

Kimberley

£6 a month works out to about £1.50 a week and just over 20p a day. Still the cheapest Bank to charge for Overdrafts.