Offset between accounts: what is the limit?

01/09/2020

If you hold several accounts at one bank and you become overdrawn on one account, under the right of offset the bank may transfer sufficient funds from your other account(s) to offset the amount overdrawn.

Offset between accounts consists of transferring money to an account that is overdrawn from an account that has a positive balance held by the same person. Your bank is not obliged to inform you before it does this, but your account contract must clearly state that it may do so.

This practice is legal, but it is subject to regulationsAbre en ventana nueva that set limits on attachment of earnings (salary, pension).

These limits do not affect offset. However, good banking practice requires that, when offsetting between accounts, banks will refrain from transferring the portion of the salary or pension that is considered minimum income under the regulations.

This same criterion applies to income received under Spain’s Minimum Income SchemeAbre en ventana nueva which aims to guarantee minimum income for the economically vulnerable. Accordingly, as this is minimum essential income, banks should not put their own interests or their right to offset before their customers’ interests.

Our 2019 Annual Complaints Report published recently has more information in this respect see Chapter 2, section 6.4.9 (Spanish version only).