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overdrafts

Overdrafts

An overdraft is simply a way of borrowing money for a short period of time, perhaps to pay an unexpected bill. You can request our overdraft services either formally or informally.

To use our overdraft services you must be aged 18 or over. Overdrafts are offered subject to status.

Overdraft

An overdraft is simply a way of borrowing money for a short period of time, perhaps to pay an unexpected bill. You can request our overdraft services either formally or informally.

We would always encourage you to request our overdraft services formally rather than informally.

Formal overdraft

You can request our overdraft services in advance and if we agree to your request (by agreeing an overdraft limit, or an increase to an existing overdraft limit) we will tell you your overdraft limit and confirm the terms in writing. A formal overdraft lasts for 12 months and we will write to you towards the end of this period with information about what we may be prepared to offer you when your current overdraft expires. We will charge you £20 to set up or renew a formal overdraft.

Informal overdraft

If you have not formally requested our overdraft services as above, you may still request an overdraft by undertaking a payment or withdrawal from your account, even though no overdraft limit has been agreed or where the payment or withdrawal would cause you to exceed any agreed or standard overdraft limit. Please note that, depending on your circumstances, we may either accept or decline your request. We will charge you £20 to set up, change or renew a formal overdraft.

We will charge you £20 for every informal overdraft request that is approved and £15 for an informal overdraft request that is declined and where the item is returned unpaid.

Tracking incurred charges

We keep a record of service charges for informal overdraft requests and unpaid items. We categorise the charges by what’s called a ‘charging period’. A charging period usually starts on the 5th of the first month and finishes on the 4th of the following month.

This information is then added to a statement that we send you at the end of the charging period. The charges are taken from your account on the date shown on your statement.

Formal overdrafts

If you decide that an overdraft is the best option for you, we would encourage you to request the overdraft formally as this is generally less expensive than an overdraft that is not agreed in advance. Where we agree to your request for a formal overdraft, the facility will be provided for up to 12 months and there will be an annual charge for this service of £20.

At the end of the 12 month period we will contact you and may offer you an overdraft for a further 12 month period. Any overdraft limit that we offer you will be based on your circumstances and may be lower or higher than your current overdraft limit. A charge of £20 will be charged for each 12 month period. These charges apply even if you do not use the overdraft. You may request a change to your overdraft limit at any time and if we agree there will be a service charge of £20 to make this change.

In addition to the overdraft service charges above, you will also be required to pay overdraft interest on the amount that you borrow dependent on the type of account that you hold. Please refer to your account charges leaflet for further information.

Informal overdrafts

If you request an informal overdraft which we agree to provide there will be a charge for this service of £20 when you first go informally overdrawn. We operate on monthly charging periods (the charging period used for interest, commission and charges is the 5th of month one to 4th of month two, please note that days may vary when they do not fall on working days) and if you make a further request for an informal overdraft in a charging period - i.e. your informal overdraft increases - there will be a further charge for this service of £20.

If you request an informal overdraft and we do not agree, we will refuse to make the payment you request by returning it and there will be a charge of £15. Any subsequent requests for an informal overdraft may also be declined and the item returned unpaid and a charge will be applied for each item returned unpaid.

In addition to the overdraft service charges above, you will also be required to pay overdraft interest on the amount that you borrow dependent on the type of account that you hold. Please refer to your account charges leaflet for further information.

Please view our charging scenarios. We have developed these examples with the office of fair trading and leading consumer groups to help you think about how changing the way you use your account can affect the amount we may charge you.

Help with infrequent charges

However carefully you manage your account you may occasionally go overdrawn when you hadn’t intended to, resulting in charges. We will automatically waive these charges when you request an informal overdraft, providing that:

  • you have maintained your account in credit (or within any agreed overdraft limits) for the previous 366 days, and
  • you return your account to credit (or inside an agreed overdraft limit) within 6 business days.

Putting an Upper Limit on Charges

We will limit your informal overdraft service charges and unpaid item charges to £150 per quarter. If we have provided you with any refunds during that quarter then this amount will increase by the amount of those refunds.

Is an overdraft right for me?

Our services are designed to meet short-term borrowing needs such as an unexpected bill. Where you have an ongoing or longer term borrowing need, another type of product, for example a personal loan or credit card, may be more suitable. Maintaining an overdrawn balance close to your overdraft limit may limit your ability to respond to unexpected bills or payments and you will incur interest charges on the amount you have borrowed. You should consider how you are going to repay an overdraft before making use of this facility.

Once we have agreed to provide you with a formal or informal overdraft, you have a right to cancel it within 14 days (10 Business Days). If you wish to do so please write to us at The Co-operative Bank p.l.c., Delf House, Skelmersdale WN8 6GH or telephone us on 08457 212 212. If you decide to cancel you must immediately repay us the full amount you owe us including any interest or charges. If you do not cancel you are still free to end your overdraft at any time by repaying all amounts owed to us.

How to apply

You can apply for a formal overdraft by calling 08448 44 88 44 (charges apply) or at your local branch. We are available 24 hours each day, seven days a week. You can be assured that every request for our overdraft services is considered based upon an individual’s circumstances and in line with our responsible lending policies. We will provide you with a decision immediately in most cases.

Should you be experiencing financial difficulties  we would recommend that you contact us as early as possible. We will be happy to discuss your needs and to help you understand what options might be available to you.

Further information

You can get further information by calling 08448 44 88 44 (charges apply). Our branches also offer a free financial review service and will be happy to discuss our full range of borrowing services including overdrafts.

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Important documents

The Co-operative Bank p.l.c., P.O. Box 101, 1 Balloon Street, Manchester, M60 4EP.  Registered in England and Wales No. 990937. smile is a trading name of The  Co-operative Bank  which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (No.121885) and holds an Interim Permission in respect of consumer credit activities and subscribes to the Lending Code and the Financial Ombudsman Service.