Overdraft Service: overdraft more details | HSBC UK


Key product information you need to know about our Overdraft Service

Why have an HSBC overdraft?

An overdraft could give you peace of mind by allowing you to make payments when you have run out of money in your account.

It means with an overdraft it can help you through expensive months like December, or paying unexpected costs such as an emergency plumber.

If you arrange a formal overdraft and keep within your limit it can help you prepare for life's unexpected costs.

Informal overdraft setup fees - and how to avoid them

If your overdraft limit is adequate and you don't go above it, all you need pay is the overdraft interest. We only charge an overdraft setup fee if you have more than one informal overdraft request agreed in a six month period.

Informal overdrafts are charged according to our Price List and Fair Fees policy.

We will always try to make your payments even if you do not have sufficient cleared funds in your account and the payment would take you over any agreed overdraft facility.

Remember, it's more cost effective to arrange an adequate formal overdraft than several informal overdrafts.

Agreeing an overdraft limit in advance

A formal request occurs when you approach us to arrange an overdraft limit.

There is no overdraft setup fee for agreeing a formal limit and it gives you greater control of your finances – you'll have an agreed limit within which you know items will be paid without incurring any overdraft fees. It's important to choose an adequate limit because if you go over it you may be charged an overdraft setup fee.

Your overdraft limit will be agreed until further notice, we will review the facility annually and contact you if we will be making any changes.

Going overdrawn without agreeing it in advance

An informal request is when you authorise a payment that would take your account overdrawn or beyond your formal limit without agreeing in advance an overdraft to cover it.

We will always consider an informal request and will make the payment if we can, subject to status. If approved the overdraft will be provided for 31 days to cover the item concerned.

How you can keep track of your balance

There are several ways you can keep an eye on where your balance is in relation to your overdraft limit.

You can get text message alerts sent to your mobile at no extra cost to let you know you when you’re nearing your limit - simply call us on 08457 404 404 to set them up.

HSBC Fast Balance is an app for checking your balance and last six transactions on your smartphone.

You can use HSBC cash machines, which will warn you if you try to make a withdrawal that might result in you being charged. You can use Internet banking to view balances, statements and payment details - plus increase (subject to status), decrease or cancel your overdraft limit. Or you can ring us on 08457 404 404 any time of the day or night to check your balance using our automated service.

The cost of your overdraft

If you keep within your formal overdraft limit the only cost you need pay is interest. Here are the rates that apply to overdrafts on our accounts, at a glance.

Name Of Account EAR (The interest you are charged on your overdrawn balance)
HSBC Premier 0% on first £500 overdrawn then 11.9%
Representative example (assumed overdraft £1,200): 0% EAR variable on the first £500 and 11.9% EAR on the rest.
HSBC Advance 17.9%
Representative example (assumed overdraft £1,200): 17.9% EAR variable
Bank Account 19.9%
Representative example (assumed overdraft £1,200): 19.9% EAR variable
Student Bank Account 0% EAR
Representative example (assumed overdraft £3,000): 0% EAR variable.
Graduate Bank Account 19.9% on balances above your interest-free entitlement
Representative example (assumed overdraft £1,200): 1st year 0% EAR variable on the first £1500, 2nd year 0% EAR variable on the first £1,000 and 19.9% EAR on the rest.

There are various scenarios in which you may be charged an overdraft setup fee, including: if you go over your formal overdraft limit, if you request more than one informal overdraft within a six month period.

To know more about the situations in which you may be charged, please see these examples of charges.

For details of the charges that may be applicable, please click here to see the relevant Price List.

Our Fair Fees policy

Our Fair Fees policy is the result of us asking customers like you what you think it's fair to charge you – and what's not. Here's a list of situations that you can rest assured you won't be charged for by HSBC.

  • We will not charge an overdraft setup fee for a formal overdraft
  • We won't charge an overdraft setup fee if we haven't agreed to an informal overdraft request from you within the last six months
  • We won't charge you more in overdraft setup fees than the informal overdraft requested (e.g. a £15 overdraft will not cost you say, £50)
  • We won't charge you an overdraft setup fee for an informal overdraft request of £10 or less
  • We won't charge you additional fees if it's the overdraft fees (or interest) that have taken you overdrawn, or further overdrawn
  • We will not charge you more than one overdraft setup fee a day
  • We won't charge you an overdraft setup fee for informal requests if your account is credited with covering funds by the end of the same day

Account Management Service

Every month we will review your account to make sure your overdraft borrowing is suitable, based on your salary or other income. If we feel that your overdraft borrowing may be too much compared to your income, we will contact you to let you know an appropriate amount to pay in. We will also explain how we may be able to help, in the short and long term, if you are unable to pay in this amount.

How is Bank Account Pay Monthly different?

Bank Account Pay Monthly was specially introduced to help customers keep a firmer grip on their account.

Customers can request a formal overdraft facility. Whether you have a formal limit or not, we also provide customers with an automatic £50 overdraft 'buffer' as a safety net.

The key difference with Bank Account Pay Monthly is that any payment requests that take you over your formal limit and your £50 buffer will normally be refused. However when payments are returned you won't be charged return fees although your credit rating may be affected. Debit interest will still be charged on all overdrawn balances.

To help Bank Account Pay Monthly customers manage their finances, we send text alerts the morning after your balance reaches 60%, 80% or 95% of your overdraft limit. We also offer the Pay Monthly Money Calendar, a quick, interactive tool to help you take an objective look at your spending. Bank Account Pay Monthly is currently available for a fee of £10 a month.

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