Coronavirus support for personal current account customers with an arranged overdraft

2 July 2020

3 min read

These include:

  • waiving the interest on the first £500 of an arranged overdraft; and
  • delaying the introduction of the increased overdraft interest rate of 35.9%, which was due to come into effect on 4 April.

Both of these concessions are applied automatically and will end on 4 August 2020 when the normal account terms and conditions will resume. This will mean that the annual interest rate applied to overdrafts until that time will continue to be 18.9% (or 15.9% for Privilege, Privilege Premier & smilemore and 9.9% for student accounts).

We’re committed to ensuring customers who are, or will become, financially impacted by coronavirus after 4 August continue to receive the help and support they need. This will include providing customers with extra support for an additional 2 months (3 months in total) from 5 August and more information will be provided in due course.

Interest-free buffer on arranged overdrafts

An interest-free overdraft buffer means you’ll pay no interest on your arranged overdraft up to the value of £500.

When the interest-free buffer starts and ends

The £500 interest-free buffer will start on 4 April 2020 and be applied until 4 August 2020. 

From 5 August 2020, you will be charged an Annual Interest Rate of 35.9% on any overdrawn balance.

If you have a current account which offers an interest-free overdraft limit, such as a Privilege, Privilege Premier, Student, or smilemore account, this limit will remain interest free.

Charges for arranged overdrafts above £500

If you have an arranged overdraft over £500, the first £500 will be interest free. You will then be charged interest on the remaining overdrawn balance.

From 4 April 2020 to 4 August 2020, we are reducing our arranged overdraft interest rates to:

  • 18.9% for Current Account, Current Account Plus, Everyday Extra & smile Current account
  • 15.9% for Privilege, Privilege Premier & smilemore
  • 9.9% for Student Account

From 5 August 2020 you will be charged 35.9% interest on any overdrawn balance.

More information on our overdraft charges

Privilege, Privilege Premier, Student, or smilemore overdrafts

If you have a Privilege, Privilege Premier, Student or smilemore current account, your interest-free overdraft limit will stay the same.

Overdraft limit is above the interest-free amount

If you have a Privilege, Privilege Premier, Student or smilemore current account and have an arranged overdraft above the interest-free amount, you will be eligible for an interest-free buffer up to the total amount of £500.

For example, if your interest-free amount is £300, you will be eligible for an additional £200 interest free overdraft.

If your arranged overdraft is above £500, you will then be charged interest on the remaining overdrawn balance.

If you don’t have an arranged overdraft

If you don't have an arranged overdraft and want to apply, you can learn more about how our overdrafts work.

If we have accepted your overdraft application, you will then receive an interest-free buffer up to the value of £500. If your arranged overdraft is above £500, you will be charged interest on the additional overdrawn balance.

After the interest-free buffer ends

From 5 August 2020, you will be charged 35.9% interest on any overdrawn balance.

More information on our overdraft charges

Your charges will be higher than what you are used to. You can use our overdraft calculator to find out how much your interest charges will be.

If you have a current account which offers an interest-free overdraft limit, such as a Privilege, Privilege Premier, Student, or smilemore account, this limit will remain interest free.

If you’re still in financial hardship, or think that you will be, please get in touch to speak to our dedicated advisors who can talk through your situation and look at different options to help and support you.

More information on the financial support we can offer

There is free, independent and impartial debt advice available if you are dealing with financial difficulties during the coronavirus pandemic.

Financial Conduct Authority coronavirus support

Money Advice Service coronavirus support

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