Overdrafts explained. A guide to our overdraft charges and how to avoid them

Transcription

1 Overdrafts explained guide to our overdraft charges and how to avoid them

2 Overdrafts explained Contents We ve put together this guide to explain the different kinds of overdrafts and show you the fees that now apply if your account goes into overdraft. We want to do all we can to help you avoid going overdrawn and incurring unnecessary charges, so we ve included some practical hints, tips and advice on managing your money too. Please take a little time to read this leaflet carefully. For full details of rates and charges that apply to your account, please visit rbs.co.uk Understanding overdrafts 4 How we can help you manage your money 12 Overdraft scenarios 16 Frequently asked questions 19 The information contained in this leaflet is correct as of 12 July

3 Understanding overdrafts Understanding overdrafts You go into overdraft when more money is taken out of your account than there is in it. There are two kinds of overdraft arranged and unarranged. It s important to understand the difference between them as each has different charges applied to them. rranged overdrafts n arranged overdraft is a limit on your current account that is agreed in advance between you and the bank and allows you to keep spending up to this agreed limit. For example, if you don t have enough money in your current account to cover your outgoings and you have an arranged overdraft limit of 500, you have access to an additional 500 of funds. The charges that apply to arranged overdrafts can be found on the next page. Unarranged overdrafts You go into an unarranged overdraft when you don t have enough money in your account to cover your outgoings and you don t have an arranged overdraft set up. You ll also go into an unarranged overdraft if your outgoings take you over your arranged overdraft limit. The charges that apply to unarranged overdrafts can be found on the following pages. 5

4 rranged overdraft charges Unarranged overdraft charges If you have an arranged overdraft, you will pay: Fees There is no charge to set up an arranged overdraft, however, a 6 rranged Overdraft Usage Fee applies per charging period if you use your arranged overdraft by more than 10. This fee does not apply to our Select Platinum ccounts, Black ccounts, Student ccounts and Graduate ccounts. If you don t have an arranged overdraft or if you exceed your arranged overdraft limit, you will pay: Fees 6 per day in Unarranged Overdraft Fees if you go overdrawn by more than 6. The number of fees you can incur in a charging period is capped at 15, so if you remain in an unarranged overdraft for 15 days or more in any charging period, the maximum fee you will pay is 90. Interest You may also be charged interest on the amount overdrawn, depending on any interest-free threshold on your account. Please see your account terms for details. What is a Charging Period? Your charging period runs from month to month, usually from the date you opened your account. For example, if you opened your account on 15 ugust, your charging period will run from the 15th of each month to the 14th of the next month. You can find out your charging period by contacting us. Interest You will not pay any interest on unarranged overdrafts. If you don t have enough money in your account to cover a payment, and we decide not to make that payment, you will pay: Fees n 6 Returned Item Fee for each payment, such as a standing order, Direct Debit or other bill, that we decide in our discretion not to pay. The number of fees you can incur in a charging period is capped at 10, so if you have more than 10 payments returned in a charging period, the maximum fee you will pay is

5 If you do not have an arranged overdraft If you go up to 6 overdrawn (into an unarranged overdraft ) you won t incur any unarranged overdraft charges If you go more than 6 overdrawn into an unarranged overdraft you will pay 6 per day. In each charging period the number of daily fees will be capped at 15 In credit 6 Buffer Unarranged Overdraft 0-6 Please note: You do not pay interest on an unarranged overdraft. If you don't have enough money in your account to cover a payment, and we decide not to make that payment, you will pay a Returned Item Fee of 6 for every payment we return unpaid maximum of 10 fees per monthly charging period

6 If you have an arranged overdraft If you go up to 10 into your arranged overdraft you won t incur any fees If you go more than 10 overdrawn you will pay a 6 rranged Overdraft Usage Fee per charging period* If you go up to 6 over your arranged overdraft limit you won't incur any unarranged overdraft charges If you go more than 6 over your arranged overdraft limit into an unarranged overdraft you will pay 6 per day in Unarranged Overdraft Fees in addition to the rranged Overdraft Usage Fee. In each charging period the number of daily fees will be capped at 15. In credit 10 Buffer rranged Overdraft 6 Buffer Unarranged Borrowing 0-10 Limit of your arranged overdraft 6 over your arranged overdraft limit You may also be charged interest on the amount overdrawn, depending on any interest-free threshold on your account. Please see your account terms for details. Please note: You do not pay interest on an unarranged overdraft. If you don't have enough money in your account to cover a payment, and we decide not to make that payment, you will pay a Returned Item Fee of 6 for every payment we return unpaid maximum of 10 fees per monthly charging period. * This fee does not apply to our Select Platinum ccounts, Black ccounts, Student ccounts and Graduate ccounts

7 7 ways we can help you avoid going overdrawn How we can help you manage your money The best way of avoiding overdraft charges is by not going overdrawn but that can be easier said than done. That s why we d like you to take a look at the ways we can help. 1. ct Now lerts 2. Balance lerts 3. Organise your outgoings 4. Use your RBS Visa Debit card 5. rrange an overdraft 6. Free 24-hour banking 7. Overdraft Control lerts ct Now lerts. This is a free text and service that can help you avoid overdraft fees. You ll receive texts and/or s that will specify the time by which you should pay money into your account to cover your current payments and/or bring your account back into credit or within any arranged overdraft limit. Network charges may apply, contact your provider for details. Balance lerts. Register for free Balance lerts and we ll text you your balance each week on whatever day suits you best you can even specify morning or afternoon. You can also set up lerts to tell you when your account goes above or below a certain limit, so you ll know when you ve received a large payment or if your money s running low. Network charges may apply, contact your provider for details. To register for Balance lerts and ct Now lerts go to rbs.co.uk/alerts or call into any branch. Organise your outgoings It s a good idea to set up standing orders and Direct Debits so they leave your account just after your salary has been paid in. This makes it easier to know how much money you have left for the rest of the month. There are no charges for setting up or amending standing orders or Direct Debits. Not all companies allow customers to change the date of your Direct Debit. Please check with your provider. Use your RBS Visa Debit card Paying by RBS Visa Debit card may also help you manage your spending. s every transaction is itemised on your statement, you can see at a glance how much you ve spent and where you ve spent your money. 13

8 How we can help you manage your money rrange an overdraft limit in advance rranging an overdraft limit with us in advance could cost you less in charges than going into an unarranged overdraft. If you think you might go overdrawn, it s always a good idea to apply for an arranged overdraft. Subject to eligibility. To apply for an arranged overdraft call (customers with hearing or speech impairments can contact us by Minicom on ) visit rbs.co.uk/personaloverdrafts or visit any branch Free 24-hour banking You can now check your balance and move money between your accounts, wherever you are online, over the phone or on your mobile (using our free iphone, ipad, BlackBerry, ndroid or Windows app). To use the app you must have an RBS personal current account with a debit card, Digital Banking and a UK mobile number starting 07. Data download charges may apply, contact your provider for details. For more information or to register for any of these services, visit rbs.co.uk/digital Overdraft Control (Select ccount only) This is an optional free service only available on our Select ccount. It is designed to help you avoid unarranged overdrafts on your account by, where possible, rejecting payments that would take your account into an unarranged overdraft. If you register for Overdraft Control, you will not be charged Returned Item Fees for payments that we reject however daily Unarranged Overdraft Fees may apply if we are unable to reject a payment that takes your account into an unarranged overdraft of greater than 25. For more information, or to register for Overdraft Control call (customers with hearing or speech impairments can contact us by Minicom on ) or visit any branch

9 Overdraft scenarios Overdraft scenarios Here are a few examples of people who have arranged overdrafts or have gone into unarranged overdrafts. They ll give you an idea of the kind of charges that are applied. I used my arranged overdraft and was charged a fee Last month I went into my arranged overdraft by 50 for 10 days so I was charged the 6 rranged Overdraft Usage fee plus interest. Total cost: 6 + interest* I used my arranged overdraft and wasn t charged a fee I rarely use my arranged overdraft but last month I went into it by 7 and was only charged interest because I did not go over the 10 buffer limit. Total cost: Interest only* I went over my 750 arranged overdraft My Select Silver account has an overdraft of 750 which I use every month. But last month I was overdrawn beyond that limit by 100. I was charged a monthly fee of 6 and interest for using my arranged overdraft and then charged 90 for using an unarranged overdraft for 16 days. There is a fee of 6 a day for using an unarranged overdraft which is capped at a maximum of 15 fees per month, so that s 6 x 15 = 90. While I was in the unarranged overdraft three cheques bounced and I was charged a 6 Returned Item Fee for each 18 in total. Total fees paid: = interest* *Your account may come with an interest-free threshold. Please see your account terms for details. 17

10 Frequently asked questions I have no arranged overdraft, went overdrawn and was charged a fee I went overdrawn by 30 for 10 days so was charged the Unarranged Overdraft Fee of 6 per day a total of 60 in fees. During that time a Direct Debit for my gas was due. The Direct Debit wasn t paid by the bank, which meant I was charged a 6 Returned Item Fee. I did not have to pay any interest as no interest is charged on unarranged overdrafts. Total cost: = 66 I have no arranged overdraft, went overdrawn but wasn t charged a fee I haven t arranged an overdraft for my account because I try not to go overdrawn. However, last month I did go into an unarranged overdraft by 3 but I was not charged any fee because I did not go over the 6 buffer. I did not have to pay any interest as no interest is charged on unarranged overdrafts. Total cost: 0 Here are some common questions our customers often ask. If you have any questions of your own, please call us on (customers with hearing or speech impairments can contact us by Minicom on ) or visit any branch and speak to a member of staff

11 Frequently asked questions Frequently asked questions Why am I charged for overdrafts? It costs the bank to provide a lending facility and we charge fees and interest to help cover this cost. How do I apply for an arranged overdraft? To apply for an arranged overdraft call (customers with hearing or speech impairments can contact us by Minicom on ) visit rbs.co.uk/personaloverdrafts or visit any branch. Can I change my overdraft limit and if so, how do I do this? You can apply to increase or decrease your limit in branch, by telephone banking, or online (if you are registered for Digital banking). Subject to eligibility. How and when will I get notified about overdraft charges? You will see any overdraft charges accrued during the charging period on the pre-notification that will be sent to you at least 14 days before the charge is debited from your account. Charges are debited 16 days after the end of your charging period. What if I go into my arranged overdraft by more than 10, then later that day another payment takes me into an unarranged overdraft? What would I be charged? You would be charged an rranged Overdraft Usage Fee of 6 plus interest (if applicable) plus a 6 Unarranged Overdraft Fee. You would then be charged a 6 fee each day you stay in an unarranged overdraft by more than 6. However, the number of Unarranged Overdraft Fees would be capped at 15 in that charging period. If I go into my arranged overdraft by more than 10 in any charging period, when do you take the 6 rranged Overdraft Usage Fee? It will be debited 16 days after the end of your charging period along with any other pre-notified fees. When does the 6 daily charge for my unarranged overdraft come out of my account? Same as arranged overdraft fee above

12 Frequently asked questions What s the maximum I will be charged in a calendar month for using an arranged overdraft by more than 10 and going into an unarranged overdraft? Overdraft fees are charged according to your charging period not calendar month. There is a fee of 6 per charging period plus interest (if applicable see your account terms for details) for using an arranged overdraft by more than 10. The maximum fees for an unarranged overdraft are 90. Please be aware that a maximum of 10 Returned Item Fees ( 60) per charging period could be charged in addition (please refer to page 7 for further details). This would lead to a total charge of 156 plus interest on the arranged balance. If Overdraft Control doesn t stop all transactions that would take me into an unarranged overdraft, what am I paying a fee for? It stops most transactions, however if your account does go into unarranged overdraft, we won t charge any Unarranged Overdraft Fees unless you are more than 25 overdrawn ( 6 for accounts without Overdraft Control)

13 The Royal Bank of Scotland plc. Registered Office: 36 St ndrew Square, Edinburgh EH12 2YB Registered in Scotland No RBS OE pril 2013