Banking News

Over the next few months, many high street banks will be implementing new overdraft charges, which is in response to new rulings by the Financial Conduct Authority (FCA). With these overdraft changes hitting the headlines, we’ve taken an in-depth look at the changes that are due to be made, along with alternative borrowing options.

NatWest is offering consumers £175 as an incentive to switch to a current account with the high street bank.

Consumers wanting to take up this offer will have to act quickly as it is only available until 2 April 2020. To receive the £175, a NatWest Select or its Reward, Reward Silver, Platinum and Black accounts must be opened before the April deadline and used as a main bank account.

In addition to this, customers need to close their existing main bank account and transfer their main account to NatWest using the Current Account Switch Service. The bank also requires that a payment of £1,500 is made into the new account and that customers log into online or mobile banking through the NatWest mobile app before 10 May 2020. If all the terms and conditions are met, customers will receive the £175 by 5 June 2020.

This offer is available to both new and existing NatWest customers. Consumers should be aware that while the Select account is free to open and operate, all the Reward accounts charge a monthly fee.

Switching to a NatWest account should be relatively simple, as the bank is part of the Current Account Switch Service scheme, which makes it easy for customers to switch banks accounts. For example, as part of the scheme, payments such as direct debits and standing orders are automatically transferred to the newly opened account within seven days.

Commenting on the offer, Bruno Genovese, head of NatWest current accounts, said: “Switching bank accounts couldn’t be easier and we hope our highest ever guaranteed switcher offer will give an added incentive for those who have been thinking about switching to a bank that can help make you more confident about money.”

Challenger bank N26 has announced that it will close all its UK bank accounts on the 15 April this year as it leaves the UK market.

As part of its removal from the UK, the bank is no longer offering new bank accounts to those based in the UK. N26, which is a German-based bank, has stated that it is closing its UK accounts as, due to the UK leaving the European Union, it will no longer be able to operate here with its European banking licence.

Lloyds Banking Group and TSB are the latest banks to announce changes to their overdraft fees, which will see some borrowers being charged 49.9% for going into their overdraft.
Lloyds Banking Group, which includes high street brands Lloyds, Bank of Scotland and Halifax, has changed its overdraft fees so that from the 6 April 2020, customers will be charged a flat rate of 39.9% or 49.9% EAR on all overdraft borrowing, while Club Lloyds customers will be charged either 27.5% or 49.9%. The rate customers are charged depends on existing information the bank holds about the customer’s credit history and how they operate their account.

The bank has also revealed that it is dropping the interest-free tier on some accounts to just £50, however it has not stated which accounts will be impacted.

Lloyds Banking Group has stated that the majority of its customers will be charged the lower rate, with many paying less on the new overdraft fee charges than its current charges, however it means that for many consumers it will be cheaper to borrow on a credit card instead.