Fixed fees for borrowing through an overdraft
will also be banned - also helping to make the overall costs easier to understand and compare with other providers.
Despite its mission to serve low-income and underserved communities, Southern Bancorp charges overdraft
fees to as many businesses as it does to individuals, CEO Darren Williams said.
The regulator is not proposing to cap overdraft
prices but it will actively monitor developments.
Under a raft of measures, fixed fees for overdrafts
will also be banned and replaced with a single interest rate.
Banks have been using tricks to charge people what seems like a fair amount for their overdrafts
, but can work out to be eye-wateringly expensive.
It said the cost differences of providing the two overdrafts
did not justify the "much higher prices" for unarranged overdrafts
StepChange head of policy Peter Tutton said: "These should help to disrupt the toxic 'debt spiral' effect that overdrafts
can create, trapping people in a persistent cycle of overdraft
UP TO PS1,500-ish: If your credit score isn't too bad, a nationwide.co.uk FlexDirect account gives a year's 0 per cent overdraft
If you rely on an overdraft
, it's important you check and compare the costs - and if you find an account with cheaper charges, switch.
ICICI Bank will also offer a facility of instant online sanction of overdraft
facility to MSME customers of other banks shortly.
Federal Reserve Board rules that take effect July 1 will require banks to get customers' permission before enrolling them in overdraft
services for ATM and debit card transactions.
The idea of overdraft
protection isn't new - banks have long been willing to cover not-sufficient-funds checks for their best customers, or make an automatic transfer from a savings account to avoid a checking overdraft