8 December 2006
NatWest bank has announced that it is to raise its overdraft interest rates for the second time in three months, making it the second major high street bank to do so this week.
Customers at NatWest will face an average interest rate rise to 17.44% from January 2nd, marking almost a 3% increase since September 1st of this year.
Lloyds TSB announced its own current accounts rate rise earlier this weeks and was accused by consumer rights groups of attempting to hide it from the public by launching its 'debt-saving' debit card, which rounds all purchases up to the nearest pound and deposits the change into a savings account.
Combined, both banks are estimated to make £47.93 million in revenue in 2007 from their 4.5 million customers who are regularly overdrawn across both banks, according to research by the price switching and comparison website uSwitch.com.
Nick White, director of financial services at uSwitch.com, urged existing customers of the two banks not to become victims of apathy and to consider looking around for a better current account.
"Customers of NatWest who regularly find themselves overdrawn should consider switching away to a provider that charges lower overdraft rates, such as Alliance & Leicester's Premier Direct current account which offer a 0% 12-month introductory rate which reverts to a 5.9% typical EAR," Mr White recommended.
"A customer switching to this account with the average overdraft of £677 would save £114.146 in just one year."
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