A new current account has been unveiled that will not charge customers for going withdrawn, even if they have no agreed overdraft.

The Santander group which includes Abbey, Bradford & Bingley and Alliance & Leicester announced the plans, days before a court ruling on unfair bank charges.

Santander said that the move was part of an initiative to convert their home loans customers to current account customers as well.
The Santander Zero account also has benefits such as an interest rate of 12.9 percent on any loans, which is the cheapest overdraft rate currently available, as well as not being charged foreign exchange fees when using overseas ATMs.

Customers who have at least £1,000 credit in their accounts can earn 6 percent gross interest on their balances for a year.

The Santander group denied that the announcement was related in any way to next week’s High Court judgement regarding unauthorised bank charges. A verdict from the Supreme Court is due next Wednesday after banks, including Santander, appealed against whether the Office of Fair Trading (OFT) should have the power to decide if the unauthorised charges are fair or not.

Around one million people have claimed for the return of bank charges, which were unauthorised, but all cases have been placed on hold awaiting the outcome of the case.