Overdrafts are a form of borrowing and they can affect your credit score and report.

It’s up to you how much you pay back and when you make a payment. This is so long as you’re on top of managing your overdraft, such as staying within your arranged overdraft limit and making sure there are regular amounts of money coming into your account.

Overdrafts are charged monthly and the amount you pay back depends on how much you’re overdrawn by and the type of current account you have.

Once your application for an arranged overdraft has been approved, it will appear on your account immediately for existing customers and in a few days for customers new to TSB . You can check your overdraft limit in the mobile app, Internet Bank, Telephone Bank and in our local branches.

An unarranged overdraft is when you spend more money than you have in your account and in your arranged overdraft.

For example, you may try to make a Direct Debit payment and you don’t have enough money. If we agree, we'll provide you with an unarranged overdraft (or extend your existing one) to cover the payment. If we do not agree, you won't be able to make the payment (it will be refused due to a lack of funds).

We’ll never charge you more than £30 each monthly billing period for the total of all these fees:

• Unarranged Overdraft interest
• Returned Item Fees

To make comparing bank products easier for you, banks are setting a maximum monthly charge for unarranged borrowing fees. Each bank may charge different fees, but all banks are explaining it the same way, with the same wording.

Monthly cap on unarranged overdraft charges

1. Each current account will set a monthly maximum charge for:
   a) Going overdrawn when you have not arranged an overdraft.
   b) Going over/past your arranged overdraft limit (if you have one).
2. This cap covers:
   a) Interest for going over/past your arranged overdraft limit.
   b) Fees for each payment your bank allows despite lack of funds.
   c) Fees for each payment your bank refuses due to lack of funds.

As well as easy access to your bank account balance and other information through cash machines, Internet and Mobile Banking, we offer specific services to help you avoid unnecessary overdraft interest:

• Grace period. You have until 10pm (UK time) to pay enough money into your account to avoid any overdraft interest that we may charge that day
• Retry periods. If you don’t have enough money in your account to make a payment, we’ll give you extra time to put money into it. For Direct Debits and cheques, we’ll try to take the payment shortly after midnight on the due date or next working day, and again after 2.30pm that same day. For standing orders and future dated payments, we’ll also try a third time shortly after midnight the next working day after we first tried to make the payment

We've changed the way your available balance is shown. On 12 January 2020, to comply with banking industry regulations we changed the way we calculate your available balance. It still takes into account any pending transactions, but no longer includes your arranged overdraft limit (if you have one). Your arranged overdraft limit and remaining overdraft will be shown on separate lines.

For example, if you have £50 in your account with a £200 arranged overdraft and you have a £80 debit card transaction pending, you'll see:

• Available balance: -£30
• Remaining overdraft: £170
• Overdraft limit will always show £200

You'll see these changes on internet banking immediately, and in our mobile app within the next version available in the coming weeks.