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Co-op & Smile latest to raise overdraft rates

The Co-op and its sister bank Smile have become the latest current account providers to announce a rise in overdraft costs.

The pair will raise the price of going into the red on virtually all accounts from 6 August via a hike in interest rates.

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Earlier this month, Halifax revealed customers over £2,000 overdrawn will pay more from November.

Lloyds TSB and Bank of Scotland revealed last weekend their overdraft fees will rise in October, though customers who slip into the red will avoid charges.

A typical Co-op or Smile customer with an average agreed overdraft balance of £540 will pay £1.35 per month more.

The table below shows the banks' overdraft interest rates.

Agreed Overdraft Now 6 August Now 6 August
Co-op & Smile overdraft interest charges
Account Agreed overdraft Unagreed overdraft
Co-op Current Account 15.9% 18.9% 15.9% 18.9%
Co-op Current Account Plus 15.9% 18.9% 15.9% 18.9%
Co-op Privilege 12.9% 15.9% 15.9% 18.9%
Co-op Privilege Premier 9.9% 15.9% 15.9% 18.9%
Co-op Student 9.9% 9.9% 15.9% 18.9%
Smile 15.9% 18.9% 15.9% 18.9%
Smile More 11.9% 15.9% 15.9% 18.9%
Smile Student 9.9% 9.9% 15.9% 18.9%

There is no change to the annual £20 charge to have an overdraft.

Meanwhile fees for exceeding your limit will stay the same. They are a £20 monthly charge, £20 for each day the unagreed overdraft balance rises and £15 for a bounced payment. These fees are capped at £150 per quarter-year.

Customers can avoid all overdraft fees if they have maintained their account well over the past year and return their account to credit within six working days, or back into an agreed overdraft if they're about to be hit with unagreed fees.

A Co-op spokeswoman says: "The last change that we made to our overdraft rates was over four years ago and we believe they remain fair and transparent.

"We are in the process of contacting all affected customers to notify them of these changes and provide advice about their account."

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