Arranged Overdraft: when is interest accrued?

qbadger

(This is a question for bank accounts with overdraft facility in general, though I appreciate there may be no rule of thumb here and the answer is just different for every provider. In which case, please specify which bank/account in your response.)

When arranged overdraft has been entered into, is there a "grace period" before interest is accrued? For example, would I get until say, 5pm on the same day to make a deposit to get out of the overdraft to avoid accruing any interest?

Ballard

There will be a cut off time, at which point the balance will accrue interest. If you’re overdrawn all day but pay in sufficient funds 1 minute before the cut off you won’t be charged interest. Banks will set their own cut offs time. 

zagfles

With First Direct you need to pay by 23:45. I know because they send a text saying that when you exceed the interest free £250. 

qbadger

So to compile a list of known cut off times:

First Direct / HSBC - 23:45
Barclays - 18:45
Monzo - ?
Kroo - ?
Santander - 20:15
BOS / Halifax - 14:30
Nationwide - 14:30
NatWest / RBS - 14:00 (?)

daveyjp

Santander send a message when O/D is used advising if you credit the account by IIRC end of working day no interest will be charged,

jimjames

BOS/Halifax 2.30pm
Nationwide 2.30pm

With Halifax it's perfect, I keep zero balance and money in savings, just move sufficient over each day to get account back to zero/minimal credit

Nasqueron

qbadger said:

So to compile a list of known cut off times:

First Direct / HSBC - 23:45
Barclays - 18:45
Monzo - ?
Kroo - ?
Santander - end of working day (?)
BOS / Halifax - 14:30
Nationwide - 14:30

NatWest I believe it's 2 or 3pm, not seen it for a while and don't fancy triggering it. Can only confirm that for the £2 a month account though

kaMelo

Santander texts state funds must be deposited by 2:00 pm to avoid being charged.

Ballard

kaMelo said:

Santander texts state funds must be deposited by 2:00 pm to avoid being charged.

2pm seems very early. Is this definitely to avoid interest, or is it to avoid items being returned unpaid, and then charged?

Happy to accept that it’s the former, it just seems very early, bearing in mind banks don’t close their tills at this time. If it’s the latter then that’s a different question. 

Nasqueron

Ballard said:

kaMelo said:

Santander texts state funds must be deposited by 2:00 pm to avoid being charged.

2pm seems very early. Is this definitely to avoid interest, or is it to avoid items being returned unpaid, and then charged?

Happy to accept that it’s the former, it just seems very early, bearing in mind banks don’t close their tills at this time. If it’s the latter then that’s a different question. 

NatWest one says something to the effect of "your account is overdrawn, please deposit funds by x PM to avoid charges". This is specifically about when say a DD is taken and you go under £0 into an unarranged OD

kaMelo

Ballard said:

kaMelo said:

Santander texts state funds must be deposited by 2:00 pm to avoid being charged.

2pm seems very early. Is this definitely to avoid interest, or is it to avoid items being returned unpaid, and then charged?

Happy to accept that it’s the former, it just seems very early, bearing in mind banks don’t close their tills at this time. If it’s the latter then that’s a different question. 

After re reading a text sent by Santander, which reads very similar to the one posted by @Nasqueron,  I think both of you are probably correct in that the 2:00 pm cut off is mentioned in relation to DD's being returned unpaid, there is no mention of overdraft charges.