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