An overdraft is a borrowing facility designed to help you manage your cash flow, allowing you to borrow when needed and repay on a regular basis. Our overdrafts are repayable on demand; this means that the bank may ask you to repay borrowings or reduce an agreed overdraft limit at any time. You must be at least 18 years old to have an overdraft.
An arranged overdraft is an individually negotiated, written agreement between you and the bank. The arrangement allows you to borrow money up to a certain limit on your current account as the need arises. To request an arranged overdraft, please contact your relationship manager.
If you request an arranged overdraft, the bank may conduct a credit-reference check on you. If you then approach another lender for borrowing, they may see that the check was conducted, which could influence their willingness to extend credit to you.
An unarranged overdraft arises when the bank allows you to spend money that is not in your current account and you do not have an arranged overdraft in place to cover the spending. Unarranged overdrafts are generally more expensive than arranged overdrafts.
The bank is not obliged to approve such expenditure; your items may not be paid. Excessive use of an unarranged overdraft may result in the bank being less willing to let you borrow in the future.
For both arranged and unarranged overdrafts, interest is calculated daily on the amount borrowed. The last page of your current-account statement will show the applicable interest rate if you have an arranged or unarranged overdraft during the statement period.
The interest rate for any overdraft will not exceed the bank’s Managed Overdraft Rate ('MOR'). MOR is currently 1.5% per month; this is equivalent to an Annual Percentage Rate (‘APR’) of 19.6%. This rate is subject to review and does not take into account other costs and/or charges that may be applicable to the current account. The applicable rate will be confirmed to you in writing, either in your arranged overdraft agreement or following the first use of an unarranged overdraft.
Arranged overdrafts may be subject to annual arrangement fees. These fees are specified in the written agreement between you and the bank.
There are no other fees associated with the bank’s arranged overdrafts.
Overdrafts offer a short-term solution to allow you to carry out transactions while waiting for expected funds to arrive in your account.
If you do not expect to receive the money to meet your transactions within a month, you should speak to your relationship manager. We may be able to offer you a borrowing solution more appropriate to your needs and at a lower rate of interest.
Cancelling an overdraft
You can cancel or reduce your arranged overdraft limit at any time, as long as the overdraft does not exceed the new limit at the time of the reduction. Please contact your relationship manager to request a limit reduction.
If you would like to learn more about overdrafts, please contact your relationship manager.