Nationwide, the biggest building society, has become the latest institution to hit current account customers, announcing a 3% rise in overdraft interest rates despite the Bank of England’s decision to keep rates on hold, writes Elizabeth Colman.

Royal Bank of Scotland and its subsidiary, NatWest, have also increased fees on packaged current accounts by up to 16%.

Experts said banks and building societies were raising revenues ahead of an expected move to cap overdraft charges. Nationwide will increase interest rates on overdrafts by three percentage points to 12.45% from June 1. It has also raised the limit for those entitled to its best credit-balance interest rates from £1,000 to £1,500.

Last month, Nationwide cut interest rates on credit balances by 0.25 percentage points but did not reduce overdraft rates.

RBS confirmed this week that it was raising the fee on its Royalties accounts as well as on its basic NatWest Advantage accounts by 95p, and the fee on the NatWest Advantage Private accounts by £1.45 to £19.95.