Arranged overdraft - We agree in advance that you may borrow money when there is no money left in your account. The agreement determines a maximum amount that can be borrowed, and whether fees and interest will be charged to you.
Buffer - A small additional amount over and above your arranged overdraft limit, to allow for transactions to be made without taking you into an unarranged overdraft.
Cap - The maximum amount of charges you can incur in a calendar or statement month.
EAR - Equivalent Annual Rate is the cost of an overdraft stated as a yearly rate, taking into account the compounding of interest. You can use it to compare rates offered by different providers. We work out interest each day on any overdrawn amount and take it from your account monthly, giving you 28 days’ notice of the amount. Any interest charged is added to the balance outstanding.
Allowing a payment despite lack of funds: Paid transaction fee - We allow a payment to be made from your account although there is not enough money in it (or it would take you past your arranged overdraft limit). This will mean you’re using an unarranged overdraft.
Reserve limit - The amount up to which we’re prepared to pay transactions above your agreed arranged overdraft limit. It provides you with more flexibility when managing your money. Beyond this point, we will refuse payments due to lack of funds. Payments above the arranged overdraft limit incur the relevant unarranged overdraft usage fees.
Unarranged overdraft - You borrow money when there is no money left in your account (or when you go past your arranged overdraft limit) and this has not been agreed with us in advance.
Refusing a payment due to lack of funds: Unpaid transaction fee - We refuse a payment from your account because there is not enough money in it (or it would take you past the arranged overdraft limit).