0 £0.00
This item was added to your basket
Credit Strategy homepage

Dear visitor,
You are viewing 1 of your 1 free articles

We’ve invested in our content to provide more news, analysis, features, interviews and opinions across a wide range of Credit and Financial Services. Register now to access more of the trustworthy, insightful information that’s on offer.

Register now or Login

HSBC to bring in single overdraft rate of 40 percent

HSBC plans to introduce a single overdraft rate of 39.9 percent for its UK customers from mid-March 2020, meaning it will be as much as quadrupling the rate it charges some existing customers.  

Share on LinkedInShare on TwittereCard

The rate change comes as part of HSBC’s process of “simplifying” its overdraft structure which aims to “help overdraft customers keep a closer eye on their finances”.


Further changes include removing the £5 daily fee for going into an unarranged overdraft, reducing the maximum monthly charge from £80 to £20 on unarranged overdrafts and the introduction of an interest free £25 buffer on some accounts.


If a customer is overdrawn by £200 in an unarranged overdraft for 15 days, as of March they would be charged £2.78, instead of £80 under the old structure.


The new rates come as a response to rules from regulators designed to protect customers. In a statement, HSBC said combined with the fact it does not charge fixed fees or returned item fees, it means “the product is one of the most transparent and fair in the market”.


The Financial Conduct Authority (FCA) is introducing regulations to reform the “dysfunctional” overdraft market. According to the FCA, these changes “represent the biggest overhaul to the overdraft market for a generation”. Under the new regulations, which come into effect in April, unarranged overdrafts cannot be more expensive than arranged overdrafts.


According to the FCA, there are 14 million people in the UK who use unarranged overdrafts.


HSBC state that “for seven in ten customers who use an overdraft, it will be cheaper or cost the same”. However, this implies for around a third of their customers, they will be worse off under these new changes.


Madhu Kejriwal, HSBC UK’s head of lending and payments said: “By simplifying our overdraft charging structure we are making them easier to understand and giving customers tools to help them make better financial decisions.”

Share on LinkedInShare on TwittereCard
Add New Comment
You must be logged in to comment. Login or Register to access enhanced features of the website.


Upcoming events

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group