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Spend & Save

Money alert: Overdrafts at HSBC and First Direct

From November HSBC and first direct customers who drift into the red without permission will face different charges.

Currently each time you extend your unauthorised overdraft with the bank you incur a £25 set-up fee. That will be replaced by a £5 daily usage fee charged every day your account is over your agreed limit.

The daily usage fee will be capped at £80 a month. HSBC and first direct will also text customers who go over their pre-arranged limit, though they will not be charged if their balance is back within it before 11.45pm on the same day.

"It's good to see that the daily charge and maximum monthly charge have both been significantly reduced," said Andrew Hagger of Moneycomms. "I'm also pleased to see that, unlike some of its rivals, HSBC hasn't shifted the cost burden for unauthorised borrowing by increasing the costs for agreed overdrafts."

HSBC customers who stay within their agreed overdraft limit will continue to pay overdraft interest at between 11.9 per cent and 19.9 per cent equivalent annual rate (EAR).