HSBC announces plans for single overdraft rate of 40%

HSBC has announced it is to introduce a single overdraft rate of 39.9% for its UK customers from March 2020.

The bank suggested the change could as much as quadruple the rate it charges some customers, but also revealed it is removing a £5 daily fee for going into an unarranged overdraft, as well as introducing an interest-free £25 buffer on some accounts.

The £25 buffer will apply to Bank Accounts and Advance Bank Accounts, providing leeway for customers who are slightly overdrawn, and the bank indicated that after the removal of the £5 daily fee for unarranged overdrafts, seven out of 10 customers using an overdraft would be better off, or at least the same, following the changes.

In the UK, HSBC currently charges rates of 9.9% to 19.9% on arranged overdrafts, but the higher rate will be applied across its whole range of accounts – with the exception of its student bank account.

HSBC’s announcement followed a similar move from Nationwide Building Society in July, and the bank’s new annual rate comes in response to the recently introduced tough rules from regulators intended to protect consumers.

    Share Story:

Recent Stories


Will open banking revolutionise the lending industry
Adam Cadle speaks to Jack Tenwick, Head of UK Sales, Yolt Technology Services, about how to get the most out of your lending business and the role of open banking

Mortgage Insider Series 2 Episode 5: Outlook for the UK economy
Listen to our latest episode where we discuss the outlook for the UK economy. We hear from William Hobbs, Chief Investment Officer at Barclays Investment Solutions, who gives his view on what lies ahead for the UK after an unprecedented year of lockdowns, economic turbulence and business uncertainty.

FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.