Log in to Personal Banking Skip to content
  1. Home
  2. News
  3. 2015
  4. The Co-operative bank announces new over...

The Co-operative bank announces new overdraft created together with customers to cut the cost of borrowing

15 April 2015

  • Abolition of fees for unpaid items and for arranging an overdraft
  • Overdraft includes a £20 buffer and annual waiver so that customers aren’t penalised for small mistakes
  • Maximum quarterly charges and informal overdraft fee reduced
  • Overdraft co-created with customers
  • The new proposition demonstrates the Bank’s commitment to developing products with values and ethics at their heart

The Co-operative Bank is announcing the launch of a new overdraft linked to its range of current accounts, co-created with customers which offers a clear, simple and transparent charging structure. The new overdraft will make borrowing cheaper for all customers.

The new overdraft will help both existing and new customers take control of their finances and minimise fees and charges when small mistakes are made or when they occasionally go over their agreed limit.

A simpler charging structure and a reduction of fees, including the abolition of the unpaid item fee, will help customers who occasionally use an informal overdraft. While a market-leading buffer, a lower cap on charges and a waiver on fees will help those who quickly return to their agreed formal position.

Key features of the Bank’s overdraft offering, now in effect, include:

  • No fee for arranging a formal overdraft – making it more attractive for customers to put a formal arrangement in place
  • A £20 buffer – allowing customers to go over their limit for up to £20 without a fee being charged (interest is still applied)
  • A reduced cap on charges – customers will pay no more than £60 per quarter in fees (down from £150 per quarter)
  • A fee waiver once per year – giving customers six days to return to their agreed balance – the majority (63%) of customers are informally overdrawn for less than a week and the waiver gives them time to return to their formal arrangement before the fee is charged

 Matthew Carter, Products and Marketing Director at the Co-operative Bank, said:

 “By listening to our customers we have been able to develop an improved overdraft – which means that customers who use their overdrafts will all be better off. The new offering is clear, simple and transparent.

 “We wanted to develop an overdraft that would make a real difference to how customers manage their money. We have retained popular features such as our market leading buffer and reduced or abolished a number of other fees and charges.

 “This is a significant development of our current account proposition. It marks the commitments laid out in our recently re-launched Ethical Policy to listen to our customers and involve them in the creation of our products. This allows us to develop offerings which help put customers in control of their finances – and remind them of what we stand for.”

Changes at a glance


New offering

Changes made

Annual service fee for formal arrangement

No fee

£20 fee abolished

Unpaid charge

No fee

£15 fee abolished

Informal charge

£10 per day

Reduced from £20

Charges cap

£60 per quarter maximum

Reduced from £150 per quarter


Up to £20



Six days return to agreed limit, once a year


Debit interest

18.9% AER*


The development of the new overdraft marks the Bank’s commitment to developing products with values and ethics at their core, following the re-launch of its customer-led Ethical Policy in January 2015. As part of this it worked with its own customers and those of other banks to design the proposition, and also engaged with consumer group, Which? during its development.

Through the Bank’s consultations it found that customers wanted an overdraft that offered simplicity, fairness, and transparency, as well as features, such as a cap and buffer, to help them stay in control.

Earlier this year the Bank recommitted to, strengthened and extended its Ethical Policy, shaped by the views of 74,000 customers and colleagues**. As a result of customer feedback this now provides a framework for how the Bank operates, which includes the products and services it offers.

-- ENDS --

About The Co-operative Bank

The Co-operative Bank plc provides a full range of banking products and services to around 5 million retail and SME (Small and Medium Sized Enterprises) customers.  The Bank is committed to values and ethics in line with the principles of the co-operative movement.

Notes to Editors

* 18.9% EAR debit interest applies to current accounts currently offered: Current Account, Current Account Plus and Smile Current Account except for the Student Account which offers 0% EAR on student limit, 9.9% EAR on formal overdraft agreed above student limit, 18.9% EAR on informal balances.  Products held by customers but which are no longer offered, charge 18.9% EAR or less.  Overdraft facilities are not available on Cashminder.

** The Co‑operative Bank is the only bank with a customer-led Ethical Policy. This was launched in 1992. Since then the policy has been revised five times – in 1995, 1998, 2001,  2009 and 2014. The Ethical Policy poll was run by YouGov between from 12 June until 30 June 2014. The revised Ethical Policy, launched in January 2015, includes the commitment to offer products and services that reflect the Bank’s values and ethics.

For further information, please contact:

Karen Mignon, Lansons – 020 7294 3685 / 07766 651327 / karenm@lansons.com

Emma Beresford, Lansons – 020 7566 9714 / 07730 594806 / emmab@lansons.com

Contact us

If you'd like more help & information, you can:

Chat to us via live chat