HSBC ups interest-free overdraft from £25 to £300 to help coronavirus-hit customers

HSBC is increasing the interest-free overdraft buffer from £25 to £300 to help customers during the coronavirus crisis.

Both HSBC bank account and Advance account holders will be able to dip £300 into the red without paying interest, for a period of three months.

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The increased buffer will come into effect from this Thursday, March 26.

It will apply to all customers with the accounts, so you don't need to prove you've been specifically affected by coronavirus.

The announcement comes after HSBC hiked overdraft interest rates from 9.9 per cent to 39.9 per cent last weekend.

It follows new rules by the Financial Conduct Authority, the financial regulator, which means that from April 6, all banks must replace daily and monthly fees with a single interest rate.

If you're keen to use the increased overdraft, make sure you don't go over the limit or you'll be charged interest.

Homeowners who are struggling financially due to coronavirus can also request a mortgage payment holiday for up to three months, including those with HSBC.

While savers can get access to cash held in fixed rate accounts without fees, or you may be eligible for a temporary increase in your credit card limit.

If you're struggling financially, make sure you contact HSBC on 03457 404 404 or visit the for support.

We've made a round-up of what other banks are offering, including increased overdrafts, here.

If your bank doesn't offer a bigger overdraft, you may want to consider First Direct, which gives a £250 0 per cent overdraft.

If you dip more into the red than that, keep in mind that you'll be charged a hefty 39.9 per cent in interest.

Tracie Pearce, HSBC UK’s director of retail banking, said: "We are here for our customers in these truly extraordinary times.

"While we put in place a package of support for customers across a number of product areas, we recently added the option of a mortgage payment holiday, which we had not previously offered.

"And now we are providing additional relief on overdrafts for millions of our current account customers.

"This will provide some welcome short term cashflow support at this crucial time."

We explain how to apply for a three month mortgage holiday if you’re struggling due to the coronavirus.

Here’s some more information about what to do if you lose your job due to coronavirus.

Plus, here are your rights to sick pay if you have to self-isolate.