Current account overdraft fees to be cut by Lloyds TSB

High Street banking giant Lloyds TSB has announced recently that it will be reducing the overdraft charges on its current accounts later this year following demand from customers. The reduced overdraft fees will come into effect from 2^nd December this year, and will affect both daily and monthly fees.

Customers who go over their overdraft limits without permission will see the daily and monthly fees on their accounts cut from December, and the fee for a bounced cheque or missed direct debit will be slashed by 50 percent from the current fee of £10 to just £5.

The bank has stated that its main reason for making the changes is because it is responding to complaints made by customers relating to the amount that they have been charged on overdraft fees. The bank has also announced, however, that some of the cost will be recouped by charging extra on authorised overdrafts, which will now incur a charge of £5 per month on top of the usual interest charges.

Following in the footsteps of a number of other banks the  banking giant also stated that it will stop paying interest to current account customers that are in credit with their balances, although this is unlikely to make much difference as it only pays 0.1 percent interest on credit balances.

Mike Regnier, a Lloyds TSB director, said: “The reason we are making these changes is in response to customer feedback. Our customers are telling us that they still think our unarranged overdraft fees are too high and we are responding to that very directly by cutting them – and it is as simple as that.”