HSBC to bring in single overdraft rate of 40% for UK customers

HSBC is to bring in a single overdraft rate of 39.9% for UK customers from March 2020, as much as quadrupling the rate it charges some customers.

However, the bank is removing a £5 daily fee for going into an unarranged overdraft and introducing an interest-free £25 buffer on some accounts.

It follows a similar move from Nationwide Building Society in July.

It comes in response to tough new borrowing rules from regulators designed to protect consumers.

But one analyst warned that steep overdraft rates could now become the “new normal”.

HSBC UK currently charges rates of 9.9% to 19.9% on arranged overdrafts, but the higher rate will be applied across its whole range of accounts except for its student bank account.

The £25 buffer will apply to Bank Accounts and Advance Bank Accounts, providing leeway for those going slightly overdrawn.

Via BBC