Santander doing away with overdraft charges - but you'll need a mortgage to qualify

19 November 2009

y198333440319755With the Supreme Court ruling in the bank charges court case due next week, the banks are starting to wake up to the reality of living in a world where they can’t charge a customer £35 whenever they go a few poxy pence over their overdraft limit.

The Santander group, which includes Abbey, Alliance & Leicester and Bradford & Bingley are going all gooey-eyed in direction of potential customers and trying to woo them with a new fee-free current account.

The Santander Zero, as it will be known, will levy no charges for exceeding an overdraft limit and will charge an annual rate of 12.9% on borrowing – the lowest overdraft rate around, according to The Guardian.

Better still, customers who credit the account with a minimum of £1,000 a month will qualify for a 6% gross interest rate on credit balances for a year.

Sounds too good to be true, so what’s the catch? To qualify, a customer must have or be applying for a Santander mortgage. So they’ll make up the shortfall from the bank charges with ever-so-slightly higher interest rates on the mortgages then?

Clever bastards.

TOPICS:   Banking   Mortgages

12 comments

  • Richard
    Halifax are getting rid of bank charges in December as well, instead they are charging £1 a day whenever you're in the arranged overdraft and £5 a day for unarranged. Except not with student accounts, thankfully!
  • Elias
    Yes, a fantastic deal aside from the eye-wateringly appalling customer service so beloved of Abbey/Alliance and Leicester customers. Altho if all the bank charge reclaiming "it's not my fault" tools will all bugger off there maybe the rest of us could get some peace.
  • Debs
    Abbey/Santander should REALLY REALLY train their staff! customer service is a disgrace!! Fraud team is pathetic, managers and staff in branch HAVE NO FLAMING IDEA WHAT THEY ARE TELLING CUSTOMERS !!! Better still dont ever bank with them! simple
  • Colly
    I disagree - have banked with A&L since it was Girobank - their customer service is the best of any large company I deal with and their charges have been the most open and transparent for years
  • Brian
    Hi, my name is Brian. My mother opened an account with Bradford & Bingley when i was a youngster. I got FREE shares and things. Last month my stepfather said they are WORTHLESS??? Is he trying to pull a fast one?
  • Boris J.
    Abbey is rubbish
  • mike202
    Since Santander took over Abbey, the customer service has deteriorated - friendly staff in branches but often pitiful at call centre. The fraud department think they are some manner of supranational policing agency combining the powers of Interpol, CIA and CID - they will put a block on your debit card with even the slightest whiff of at it being used by a wrong party, such as buying a CD off the HMV website, thereby leading to gross embarrassment at the petrol station or supermarket checkout. Reactivation necessitates a long and wearisome wait through some interminable, crackling tune before having some would-be sleuth (often with an American twang, more than likely put on for effect) interrogate you as to the validity of the recent transaction - did you really order the Sound of Music, or could this be the work of some other, fraudulent agent? Been through this several times already this year and seriously thinking of opening account elsewhere, despite being with Abbey for 15 years!!!!!
  • Matt
    @ Richard That sounds to me like Halifax aren't getting rid of charges! If they are charging £1 a day or £5 then those will be bank charges.. Do you see what they did there?
  • Richard
    @Matt Lol, I forgot to mention though that they're abolishing interest on overdrafts as well so part of that could be seen as interest. I know interest isn't likely to cost £1 a day so some of it is going to replace the old style bank charge though :-P. Personally I'd prefer to just have the old bank charges and make sure I didn't go over my limit, even if it meant asking for more overdraft! Thankfully student accounts aren't affected! :-D
  • Patrick
    The main problem with that Abbey account is that the higher interest is only for one year. After that it drops to their standard interest rate - 1%. It's only worth it if you're frequently getting bank charges, have an Abbey mortgage and willing to have your pay go into the account - which isn't that great a portion of the market for the amount of publicity they've received. Use the best buy tables and sites like moneysavingexpert to pick the top products from a range of providers. If you do all your banking with one provider (like Abbey suggest) then you may get a good deal on one product but you'll likely get a poor deal on most of your other products.
  • mjpl
    Just wait five years tell them you did not understand what you were signing and that the interest rates and any other charges aren't fair then wait and get it all back again - simples
  • Inactive
    They ain't known as Shabby for no reason..

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.