personal finance

Monzo charges: Bank reveals the changes bank account holders can expect in April this year


Monzo is among a whole host of banks to announce changes to overdraft fees in recent weeks. It comes after the Financial Conduct Authority (FCA) laid down new rules about overdrafts.

The app-based bank said that as part of a new regulation, they are to move from a flat daily fee to an interest rate – allowing customers to compare rates between banks.

Monzo overdraft fee changes

Rather than a 50 pence per day charge, under the changes, Monzo will instead charge customers a single interest rate when they’re overdrawn.

The bank says it will charge everyone with a Monzo overdraft an EAR of 19 percent, 29 percent or 39 percent (variable), with the rate depending on a person’s credit score.

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Monzo will also be removing the fee free £20 buffer.

What does that mean for savers who enter the red but not by more than £20?

Monzo explained that while it is set to remove the buffer, the bank says it will inform customers when they go into their overdraft.

The challenger bank said that customers can see what the changes do to overdraft pricing via the overdraft cost calculator.

“Banks however can still refuse to make a payment if you go over your arranged overdraft limit, but these charges, must now be reasonable, costing the customer roughly what the bank or building society pays to refuse the payment.”

Overdraft charge changes

Nationwide: It already changed last November from 50p/day to 39.9 percent annual interest

HSBC was 19.9 percent, from March 14 will be 39.9 percent

First Direct was 15.9 percent, from March 14 will be 39.9 percent

M&S Bank was 15.9 percent, from March 14 will be 39.9 percent

Barclays was 75p+/day, from March 22 will charge 34.9 percent

NatWest was 19.9 percent and £6/month, from April 1 it’ll charge 39.9 percent

RBS was 19.9 percent and £6/month, from March 27 it’ll charge 39.9 percent

Santander was £1-£3/day, from April 6 will charge 39.9 percent

Starling was 15 percent, from April 1 will charge 15-35 percent

Monzo was 50p/day, from April 1 will charge 19-39 percent



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