Hmm… this is odd. I hope they aren’t in the process of changing their overdraft policy; the fact that they took Spaces into account when calculating the main balance is/was a real advantage over Monzo’s method of excluding funds in Pots.
I don’t currently have an arranged overdraft with Starling, but took a look at the Interest Rates section of the app out of curiosity and noticed the following, which took me by surprise…
I had a read of their online help article about overdrafts and sure enough:
What a nice policy! Charges for going below zero (…with no arranged overdraft, or for exceeding your AO limit) or for rejected payments often hit people when they’re struggling the most, pushing them even deeper into a place of financial hardship, and I’m not aware of a single other bank that doesn’t charge interest on unarranged overdrafts (very happy to be proven wrong though!). Even Monzo, with its consumer-friendly ‘here to help’ image charges 39% EAR, with a £15.50 monthly cap.