Bank charges for having no overdraft

Published on 1 January 1970 by Raffick Marday

HSBC has launched a new current account which charges £15 a month for not having an overdraft facility.

The Bank Account Pay Monthly account is designed for those who regularly find themselves dropping into the red and incurring charges. It features a strict limit which, once hit, customers will not be able to breach.

Anyone about to withdraw money from a cash machine that would make them overdrawn will get an on-screen warning.

And customers will also get text updates when they have used 60, 80 and 95 per cent of their overdraft. It's thought to be the first of its type in the country.

The new account has been launched after the Office of Fair Trading told banks earlier this week that they must make greater efforts to prevent customers' unauthorised borrowing. Punitive charges are also in the OFT spotlight.

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