Banks waive overdraft interest on temporary basis
Metro Bank has joined the likes of Lloyds, Nationwide, Barclays and others in offering customers temporary relief on overdraft charges, as reported on Reuters.
The bank notes in a statement that personal current account customers will not be charged any interest for using their overdraft for a period running from the start of March until the end of June.
This applies to both new and existing customers.
It will happen automatically, and customers do not need to contact the bank.
Kat Robinson, director of bank accounts at Metro Bank, says: “We’re mindful of the uncertainty caused by coronavirus and are committed to supporting our customers whose personal finances may be impacted at such a challenging time.”
“We will therefore waive all overdraft interest due from the beginning of March until the end of June for personal current account customers. We hope that this will provide some flexibility for our customers as we all adjust to the unprecedented circumstances we find ourselves in.”
Meanwhile, Banco Santander UK also announced on 27 March that it will introduce a £350 interest-free overdraft buffer for three months from 6 Apri. This means it will automatically waive interest on up to £350 of any agreed overdraft limit.
Additionally, Nationwide Building Society will not charge overdraft interest from 20 April until 1 July for those financially impacted by COVID-19. Customers can request a fee-free overdraft interest holiday by completing an online form.
Several other banks have previously announced automatic help with overdraft charges for customers.
Barclays notes that overdraft interest will be waived from 27 March to the end of April, meaning no charges for customers to use their agreed overdraft. It said customers do not need to call to set this up, as interest will automatically be removed from 27 March.
Lloyds and NatWest have announced that from 6 April, customers will be able to access a £300 interest-free overdraft. Their customers who have an agreed overdraft do not need to take any action as this will automatically be available for three months until 6 July.
HSBC has introduced a temporary £300 interest-free buffer on overdrafts for customers with its bank account and advance account for a period of three months. HSBC will apply the change to customers automatically, so they do not need to contact the bank.
Banks and building societies across the industry have previously been shaking up their overdraft charging structures as they prepare to comply with new Financial Conduct Authority overdraft rules coming into force in April.
The rules mean that from April, banks can only charge overdraft users a simple annual interest rate – without additional fees and charges.
Many providers have previously announced their intention to charge overdraft interest of around 40%.