Major changes to the way overdrafts work have been introduced. Banks will no longer be able to charge extra for using overdrafts and monthly overdraft interest rates replace fees. Find out how this will affect you.
The Financial Conduct Authority (FCA) has decided that, from 6 April 2020, banks who offer current accounts will have to make major changes to the way they charge their customers for using their overdrafts.
Major changes have been made to:
Banks will no longer be able to make increased charges when you go over your arranged overdraft limit.
There will be no increased interest or extra charges made for ‘unauthorised’ overdrafts.
All fixed daily and monthly fees on arranged overdrafts will be replaced with a single overdraft interest rate.