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Overdrafts

Understanding overdrafts

An overdraft is essentially borrowing through your current account. When you apply for an Arranged Overdraft with us, we look at your circumstances and let you know if you can have one, and how much you can borrow.

Having an overdraft can be useful as a back-up to help you deal with short term, unexpected costs. However, it can be expensive to use an overdraft regularly as the fees can mount up, especially if you go into your Unarranged Overdraft.

It is important to remember that different current accounts have different overdraft fees and charges. There are also alternative forms of borrowing available, such as loans and credit cards, which could provide cheaper alternatives depending on your personal circumstances.

Arranged and Unarranged Overdrafts

An Arranged Overdraft is when your balance is below zero (you're borrowing from the bank) but within an arranged limit. You must agree the limit with us before it's available to use.

An Unarranged Overdraft is when your account goes:

A. over your Arranged Overdraft limit, or

B. overdrawn without an Arranged Overdraft in place.

When you try to make a payment that would take you into an Unarranged Overdraft, the decision whether to allow the payment to go through is based on your individual circumstances.

Charges and fees for using an Arranged or Unarranged Overdraft depend on which account you have with us. For more details on these charges, see the 'Rates and fees' section.

Example Balance Overdraft Total funds available Customer activity What happens?
1 £200 Arranged overdraft of £100 £300 Card payment of £250 Customer goes £50 arranged overdrawn (stays within arranged overdraft limit).
2 -£450 Arranged overdraft of £500 £50 Card payment of £100 Depending on the customer's circumstances we'll decide whether or not to allow the payment. If it's allowed, the customer goes £50 unarranged overdrawn (exceeds arranged overdraft limit). If not, the payment will be declined.
3 £100 No arranged overdraft £100 Card payment of £200 Depending on the customer's circumstances we'll decide whether or not to allow the payment. If it's allowed, the customer goes £100 unarranged overdrawn (goes overdrawn without an arranged overdraft). If not, the payment will be declined.

 

If you would like some more information about understanding overdrafts, statements, how to manage your money, setting up account alerts and more, please read our 'Managing your money' leaflet 

What does it cost to have an overdraft?

If you've arranged an overdraft with us, we’ll normally charge you an Arranged Overdraft Usage Fee for each day you're using your Arranged Overdraft. An Unarranged Overdraft Usage Fee will be charged for each day you go over your arranged limit.

Depending on your account, there are also situations when you might be charged a Transaction Fee. If you try to make a payment but don’t have enough money in your account for it (or you don't have enough funds left in your overdraft to make the payment), we’ll take a look and decide whether or not to pay it, depending on your circumstances. 

Here's how these work:

  • A Paid Transaction Fee may be charged if we decide to let the payment go through that will cause you to go into or further into an Unarranged Overdraft. (See example 1)
  • If we decline or decide not to make the payment, it’s called an Unpaid Transaction. Where we do this, your account will stay in credit or in your Arranged Overdraft but you might have to pay an Unpaid Transaction Fee (see example 2). This fee could cause your account to go overdrawn.
Example Balance Overdraft Total available funds Customer activity What happens?
1 £50 No arranged overdraft £50 Direct debit payment of £80 There are not enough funds in the account to make the full payment, so the bank allows you to make a payment that results in an Unarranged Overdraft or that takes you further into an existing Unarranged Overdraft. Depending on your account you may be charged a Paid Transaction Fee.
2 £100 Arranged overdraft of £100 £200 Direct debit payment of £250 There are not enough funds in the account to make the full payment, so, depending on your account, the bank may charge you a fee because the payment was declined.

 You can find the rates and fees on our main current accounts here:

  1|2|3 Current Account 1|2|3 Lite Current Account Everyday Current Account Choice Current Account Basic Current Account
Account summary A current account that pays cashback on selected household bills and interest on your balance.* The 1|2|3 Lite Current Account gives you cashback on your household bills when you use Online or Mobile Banking, plus the usual banking facilities.* A current account with all the essentials you need to help you to manage your money. An account that helps you stay in control of your finances by helping you avoid Unarranged Overdrafts and Unarranged Overdraft Fees. This offers you the basic features of a current account. You won’t get an Overdraft facility, chequebook, or earn interest on your balance.
Monthly account fee £5 £1 n/a £10 None
Monthly funding £500 (excludes internal transfers) £500 (excludes internal transfers) n/a n/a None
Arranged Overdraft Usage Fees

Below £2,000 £1 a day

£2,000 to £2999.99 £2 a day

£3,000 and over £3 a day

Before 9 January 2017 the usage fee on any amount of Arranged Overdraft will be £1 a day

Below £2,000 £1 a day

£2,000 to £2999.99 £2 a day

£3,000 and over £3 a day

Before 9 January 2017 the usage fee on any amount of Arranged Overdraft will be £1 a day

Below £2,000 £1 a day

£2,000 to £2999.99 £2 a day

£3,000 and over £3 a day

Before 9 January 2017 the usage fee on any amount of Arranged Overdraft will be £1 a day

£1 a day capped at 20 days None
Unarranged Overdraft Usage Fees £6 a day in each monthly statement period £6 a day in each monthly statement period £6 a day in each monthly statement period None None
Paid and Unpaid Transaction Fees £0 £0 £10 for each transaction £0 £0
Total monthly overdraft fee cap £95 in each monthly statement period £95 in each monthly statement period £95 in each monthly statement period £20 n/a

Whether or not we agree to give you an overdraft will depend on your circumstances and you must repay any overdraft when we ask you to in line with our General Terms and Conditions. If you have an Arranged Overdraft on your Choice Current Account and you go beyond your limit we will continue to charge you the Arranged Overdraft Usage Fee. There are no overdraft or Transaction Fees on the Basic Current Account because you are not allowed to go overdrawn on this account.

*1|2|3 Current Account and 1|2|3 Lite Current Account: To receive cashback and/or interest, you must pay in at least £500 a month and have at least two active Direct Debits and for the 1|2|3 Lite Current Account you must also log on to Online or Mobile Banking once in every three months. A monthly account fee applies. For cashback, household bills must be paid by Direct Debit. Interest (where applicable) is paid on balances between £1,000 and £20,000. The 1|2|3 Lite Current Account does not pay interest.

From 6 April 2016, on accounts where we pay interest, you'll receive interest gross, with no income tax deducted. Take a look at our information pages to learn more

More details on our fees, including those for the 1l2l3 Student Current Account, 1l2l3 Graduate Current Account, 1l2l3 Postgraduate Current Account and International Student Current Account can be found on their respective product pages.

If you have an account which is no longer available to new customers, including the Zero Current Account, please visit our Important information for accounts no longer available to open page for details on fees.

Online and Mobile Banking

One of the best ways to stay on top of your accounts is to check your balance regularly. Online and Mobile Banking helps by letting you access your banking wherever you are. As long as you have internet access, you can log on and see not only your balance, but also what payments have gone in and out of your account and any payments that might be pending.

If you would like some more information about understanding overdrafts, statements, how to manage your money, setting up account alerts and more, please read our Managing your money leaflet

Free text and email account alerts

Signing up for account alerts means that you'll receive messages to your phone and/or email address which will tell you when different activity occurs. For example, you can set up alerts to tell you when payments of amounts you specify go in and out of your account, when your balance goes above or below set levels, and even weekly notifications of your balance and most recent transactions.

You can set up account alerts to warn you when you don't have enough money in your account to cover a payment. This will give you a chance to put money in your account before 4pm and avoid the fee. 

The £12 Fee Free Overdraft Limit

If you're in an Arranged Overdraft of £12 or less we won't charge you any Arranged Overdraft Usage Fees (Unpaid Transaction Fees may still apply, depending on the type of account you have). If you are in an Unarranged Overdraft of £12 or less you won't incur any Unarranged Overdraft Usage Fees or Paid Transaction Fees (Unpaid Transaction Fees may still apply, depending on the type of account you have).
 

Time to manage your account

If you use an Arranged or Unarranged Overdraft, you'll have until 4pm that day to credit your account with cleared funds and move your balance back into your Arranged Overdraft or into credit and avoid fees.

Reducing or cancelling your overdraft facility

An overdraft has no specific end date, which means it will continue until either you tell us you no longer want it, or we give you notice that we're reducing it or removing it in full.

If you would like to reduce or cancel your overdraft facility in full, please call 0800 9 123 123 (we're open Monday to Saturday 7am to 11pm and on Sunday 8am to 10pm). Alternatively, visit your local branch. Find your local branch with our branch locator

Having trouble paying your overdraft or other debts?

It's easy to feel overwhelmed by finances, especially if times are tight. Writing down exactly what you have coming in and out of your account could help you to figure out where your money is going.

Try filling in a budget planner to see what your spending looks like then come and talk to us in your local Santander branch if you'd like help with any of your accounts, overdrafts, loans or credit cards.

We also have some helpful information on managing your finances on our Money worries pages.

Contact us

To speak to someone at Santander for help and support, call 0800 9 123 123 (we're open Monday to Saturday 7am to 11pm and on Sunday 8am to 10pm). Alternatively, visit your local branch. Find your local branch with our branch locator

There are also a number of independent organisations that can help with debt advice.

Santander isn't associated with these organisations. Please note that some of these organisations may make a charge for their services.

Organisation How can it help? Contact details
Business Debt Line If you're self employed, Business
Debt Line can offer advice on managing your debts.

0800 197 6026

Citizen's Advice Bureau

CAB helps with independent face-to-face advice. You can go into one of their offices and speak in confidence  to an adviser or check out the  numerous online guides. www.citizensadvice.org.uk/debt-and-money/

The Department of Work and Pensions

Provides information on benefits you may be entitled to, including tax credits, state pension and support for mortgage interest. Dwp.gov.uk

Equifax

Find out about your credit rating. www.equifax.co.uk

Experian

Find out about your credit rating. www.experian.co.uk

Money Advice Service

Support with managing your finances. Guides, calculators and advice by phone or webchat. www.moneyadviceservice.org.uk/en
0800 138 7777

Mind

Leading mental health charity for England and Wales which can provide help if you feel money worries are affecting your mental health. www.mind.org.uk

PayPlan

Advice on long term debt solutions. www.payplan.com
0800 280 2816

If you'd like some more information about understanding overdrafts, statements, how to manage your money, setting up account alerts and more, please read our 'Managing your money' leaflet

Existing customers applying for an overdraft or extending a current overdraft

If you have a current account with us and would like to apply for an overdraft or an increase to your existing overdraft (depending on your circumstances), you can apply by:

New customers

If you haven't got a Santander current account and would like to open one, you can apply for an overdraft at the same time. Take a look at our full range of current accounts for more information.

Credit checks 

Using an overdraft is borrowing, or getting into debt. Because you're asking to borrow from us, if you ask for a new overdraft or overdraft extension we'll check your financial history with the three main credit agencies. This is called a credit check. If we ask for a credit check on you but don't give you an overdraft or overdraft extension, our request will stay on the files that the credit agencies keep on you.

Frequently asked questions

  • The best way to understand the difference is to think of your available balance as the amount of money you have available to spend. This is because sometimes it won’t show money that has been paid into your account until it has cleared, and it will usually show you the money you’ve paid out of your account straightaway, so you don’t spend it twice. It will also include any Arranged Overdraft facility you may have.

     

    Your current balance may show money that has been paid into your account before it has cleared and won’t normally show you the money you’ve paid out of your account until it has cleared.

  • If you know you need to borrow money over some time, perhaps for a large purchase, you could find that the interest and fees on a loan work out cheaper.

     

    A credit card could also let you borrow for the medium term, with some cards offering an interest free period on balances. Take a look at our credit card pages if you’d like to learn more.

     

    It is important to consider your current circumstances and any potential changes to your circumstances in the future for the duration of any credit agreement you may have.

  • An overdraft has no specific end date, which means it will continue until either you tell us you no longer want it, or we give you notice that we're reducing it or removing it in full.

     

    We'll regularly review any overdraft agreed with you throughout the year. We take into consideration how you manage your account within your Arranged Overdraft limit, how much you regularly pay into your account and information from Credit Reference Agencies.

     

    Overdrafts can be removed or reduced if the amount you pay into the account isn't enough to support your overdraft limit, or if the way you use your account or other account(s) not held with Santander UK don't meet our lending criteria.

     

    If, following a review, we decide to reduce or remove your Arranged Overdraft, we’ll write to you at least 30 days before we apply the change.

  • Can't find what you are looking for? More help can be found at on the Current Account FAQs page.

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