RBS and NatWest to hike overdraft interest rates - MSE News

Former_MSE_Naomi
Former_MSE_Naomi Posts: 519 Forumite
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in Budgeting & bank accounts
RBS and NatWest have become the latest banks to announce a steep hike in the interest charged on overdrafts, with some set to pay 39.49%. But the banks are also scrapping daily and monthly fees currently charged for overdrafts, meaning many will end up paying less overall to use them...
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'RBS and NatWest to hike overdraft interest rates - but many will actually pay less as fees are scrapped'
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Comments

  • Consumerist
    Consumerist Posts: 6,310 Forumite
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    This announcement of around 40% interest on overdrafts was pretty predictable following the announcements of the other banking sheep.

    Personally, I can't wait to see what the Lloyds group are going to come out with when their current interest rate on overdrafts is 84% (on the first £1,250). It will be interesting to see customer reactions if they keep the same rate from April.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • miller
    miller Posts: 1,627 Forumite
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    Will NatWest/RBS allow an unarranged overdraft to occur? As I understand it, Nationwide, Lloyds, Halifax etc. wont now these changes have been implemented.
  • Consumerist
    Consumerist Posts: 6,310 Forumite
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    edited 8 January 2020 at 5:31PM
    miller wrote: »
    Will NatWest/RBS allow an unarranged overdraft to occur? As I understand it, Nationwide, Lloyds, Halifax etc. wont now these changes have been implemented.
    As I understand it, payments made which take you into unauthorised overdraft are discretionary. It is likely they will refuse payments which would generate monthly interest exceeding their £20 cap. (According to my estimate that would probably be around £700 over a full month)

    It would probably be safer to assume that payments would be refused, however.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    Consumerist wrote: »
    It would probably be safer to assume that payments would be refused, however.
    It would be safer still to assume that payments would be accepted or refused, whichever is to your greater detriment. Not saying banks would do this deliberately, just applying Murphy's law.
    Eco Miser
    Saving money for well over half a century
  • Kazzzie75
    Kazzzie75 Posts: 2 Newbie
    I've been comparing current accounts, partly due to these overdraft changes but I'm confused as arranged overdrafts don't have a monthly cap (on the MSE website) but unarranged overdrafts do. Does this mean I will be charged 40% up to my arranged limit but a maximum of £20 per month above that?
  • Dandytf
    Dandytf Posts: 4,819 Forumite
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    Eco_Miser wrote: »
    It would be safer still to assume that payments would be accepted or refused, whichever is to your greater detriment. Not saying banks would do this deliberately, just applying Murphy's law.

    I have the 250 soon to be removed 'buffer'
    Any pennies over 250 -DD'S have been unpaid as you kindly suggest.
    Replenished CRA Reports.2020 Nissan Leaf 128-149 miles top charge. Savings depleted. VM Stream tv M250 Volted to M350 then M500 since returned to 1gb
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