Understanding your overdraft

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. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.

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's important to remember that different current accounts have different overdraft fees and charges. There are also alternative forms of borrowing, 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:

  • over your Arranged Overdraft limit, or
  • overdrawn without an Arranged Overdraft in place.

When you try to make a payment that would take you into an Unarranged Overdraft, we make the decision whether to allow the payment to go through 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 take a look at the web page for your particular account.

If you have an Arranged Overdraft with us, we’ll normally charge you an Arranged Overdraft Usage Fee for each day you use it. 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 fee for allowing or refusing a payment despite lack of funds.

Here's how these work:

  • A fee for allowing a payment despite lack of funds 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.
  • If we decline or decide not to make the payment, it’s called a fee for refusing a payment due to lack of funds. Where we do this, your account will stay in credit or in your Arranged Overdraft but you might have to pay a fee for refusing a payment due to lack of funds. This fee could cause your account to go overdrawn.

From your first monthly statement period starting on or after 10 July 2018, the total monthly overdraft fee cap of £95 will be removed. From 10 July 2018, we’re changing the amount of Unarranged Overdraft fees we charge and removing these fees altogether from some accounts.

For the 1|2|3 Current Account, 1|2|3 Lite Current Account, Select and Private Current Accounts:

Unarranged Overdraft fees will be removed from these accounts from 10 July 2018. This means you won’t pay any Unarranged Overdraft fees if your account goes into an Unarranged Overdraft position.

If you have an Arranged Overdraft facility and go into an unarranged position, Arranged Overdraft usage fees will continue to apply. We’ll remove the existing overdraft fee cap of £95 per monthly statement period. All other account features, including cashback categories, in-credit interest, monthly account fee and 1|2|3 World offers (where applicable), won’t change.

For all other current accounts where Unarranged Overdraft fees apply:

These changes are being made to the Everyday Current Account, Essentials Current Account, Student range of current accounts and current accounts no longer on sale.

From 10 July 2018, we’ll remove the existing overdraft fee cap of £95 per monthly statement period, which covers Arranged and Unarranged Overdraft fees. We’ll replace it with a lower cap of £50 per monthly statement period which will cover Unarranged Overdraft fees only, including fees for allowing or refusing a payment due to lack of funds (per transaction). This means you won’t pay more than £50 per month in Unarranged Overdraft fees.

We’re not making changes to Arranged Overdraft fees for any of our accounts, including the Choice Current Account.

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.

More details on our fees can be found on the web pages for each current account

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 to see your balance and what payments have gone in and out of your account.

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

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 fees.

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'd like to reduce or cancel your overdraft facility, you can do this through your online banking or please call 0800 9 123 123. Alternatively, visit your local branch

Existing customers

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.

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. Alternatively, visit your local branch

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.

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 £200
 

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'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 (pdf)'

To speak to someone at Santander for help and support, call 0800 9 123 123. Alternatively, visit your local branch

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