Nationwide Building Society has issued a clear explanation for customers who have spotted unexpected overdraft charges on their bank statements, detailing exactly how and when these fees are applied.
Understanding Your Overdraft Charges
The clarification came after a customer queried why they had been charged despite remaining within their interest-free buffer. "All through October I was never above £50 overdrawn (which it tells me is interest free) yet I've still had overdraft charges this month?" the customer asked.
According to the society's official guidance, most of its current accounts, excluding the FlexBasic account, come with an arranged overdraft facility. For those with a FlexPlus, FlexDirect, or FlexAccount, the first £50 of an arranged overdraft is interest-free. However, any amount borrowed beyond that is subject to a 39.9% annual interest rate (variable), which is compounded.
How and When You Are Notified
In its response, Nationwide emphasised its commitment to transparency. The building society stated that customers are given a 28-day notice period for any impending overdraft charges.
These charges are detailed in the monthly statement and will show fees that are scheduled to leave the account in the following month. This system means that some charges can be deducted two months after they were initially incurred, which can sometimes cause confusion for account holders.
Avoiding Unarranged Overdrafts and Branch Update
Nationwide also highlighted a key difference in its policy compared to some other banks: it does not offer unarranged overdrafts. If a customer attempts to make a payment that would take them over their arranged overdraft limit or leave them with a negative balance without an arranged facility, the payment will simply be stopped.
In such cases, customers will be unable to withdraw cash or make transfers until their account is back in credit or within its agreed limit. It is important to avoid this situation, as it can negatively impact your credit score.
In a separate but positive update for its members, Nationwide recently confirmed that it will keep all of its 605 branches open until at least 2030, ensuring continued access to in-person banking services across the UK.
