Bank Accounts with Overdrafts

A planned overdraft can help tide us over by giving us a little extra money if we really need it. Most banks offer a range of current accounts with overdrafts, but the details can vary from account to account.

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Monthly balance:
£1,000
£0
£750
£2,000
Monthly overdraft:
£0
£0
£500
£1,000
Days overdrawn:
0 days
0 days
15 days
31 days

Based on your input
SORT DEALS BY: Annual Earnings Annual Overdraft Cost Monthly Fee Total Earnings/Costs (annually)
Co-operative Bank Current Account
current account
  • Overdraft available (subject to status)
  • Everyday Rewards scheme
  • Contactless debit card and Apple Pay
  • Get £125 when you switch, and £25 will be donated to Centrepoint homeless youth charity
1st year:
£125
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£125
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Assumed credit limit: £1200. With debit interest at 18.9% EAR variable.
Halifax Reward
reward
  • £3 reward each month: pay in £750, have at least two direct debits and stay in credit
  • £75 cashback when you switch to Halifax
  • £50 overdraft buffer (subject to status)
  • Visa debit card, online, mobile and telephone banking
1st year:
£111
2nd year:
£36
1st year:
£0
2nd year:
£0
None1st year:
£111
2nd year:
£36
Account requirements

APPLY ONLINE
Representative example: If you use a planned overdraft of £1,200, then you will be charged £1 a day when you use it.
Danske Bank Danske Cash Reward
danske cash reward
  • £7 cash reward every month (subject to conditions), £2 monthly fee
  • No fee for arranged overdrafts of up to £7,500
  • Contactless Debit MasterCard
  • eBanking, Mobile Banking and Tablet banking
1st year:
£84
2nd year:
£84
1st year:
£0
2nd year:
£0
£2.001st year:
£60
2nd year:
£60
Account requirements

Not available
via Choose
Representative example: 18.09% EAR variable. £1,200 total amount of credit.
United Bank UK ACE Current Account
ace current account
  • No monthly Fee or Pay-In Requirements
  • Free Direct Debit facility and standing orders
  • Overdraft available, subject to status
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Overdrafts available subject to status.
HSBC Advance
advance
  • To be eligible for HSBC Advance, you will need to pay in a minimum of £1,750 per month
  • Earn credit interest with a Regular Saver account
  • £500 daily ATM cash withdrawals
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Preferential Overdraft Interest Rate. 17.9% EAR.
Clydesdale Bank B
b
  • Current Account and Instant Savings account combined
  • Overdraft available (subject to status)
  • Mobile, Internet and Telephone banking
  • Grace period of 2 working days per calendar month if you go overdrawn
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Planned borrowing: 12.50% EAR. Grace period of 2 working days if you go overdrawn
Yorkshire Bank B Current Account
b current account
  • Earn 0.25% AER (0.25% gross p.a variable) on credit balances up to £2,000 in the B current account
  • 0.50% AER, (0.50% gross p.a. variable) paid quarterly on all credit balances in the B Instant Savings account
  • Overdraft available subject to status
  • Grace period of 2 working days per calendar month if you go overdrawn
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Planned borrowing: 12.50% EAR. Grace period of 2 working days if you go overdrawn.
HSBC Bank Account
bank account
  • Preferential rate with HSBC Regular Saver account
  • HSBC debit card
  • Internet and telephone banking
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

APPLY ONLINE
Representative example: If you use an overdraft limit of £1,200 the interest rate charged will be 19.9% EAR variable.
First Trust Bank Classic Account
classic account
  • No monthly fee if your account is in credit each month
  • Online, Mobile and Phoneline Banking
  • Overdraft available (subject to status)
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: Authorised overdraft Interest Rates: Base rate + 12.00%.
Lloyds Bank Classic Account
classic account
  • Free everyday banking
  • Withdraw up to £500 a day from cash machines
  • Overdraft available subject to status, with the first £25 interest and fee free
1st year:
£0
2nd year:
£0
1st year:
£0
2nd year:
£0
None1st year:
£0
2nd year:
£0
Account requirements

Not available
via Choose
Representative example: For a Planned Overdraft of £1,200, the interest rate on the first £25 is 0% EAR variable. On the next £1,175 the interest rate is 19.89% EAR variable, with a monthly overdraft usage fee of £6.

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Any calculations provided are intended as a general guide only for comparison purposes and should not be considered as an exact representation of what you will have to pay.


How to find the cheapest bank account overdraft

What is an overdraft?

Put simply, an overdraft is a form of borrowing money, as it allows us to spend more than we have in our bank account. They're meant to be used as a safety net for the odd expensive month or unexpected bill, rather than as an extra source of money.

There are two forms of overdraft borrowing: planned and unplanned, also known as authorised and unauthorised, or formal and informal overdrafts. The key difference is that we request the use of a planned overdraft in advance, whereas an unplanned overdraft comes as a surprise to our bank.

An authorised overdraft will always be cheaper, because even if we don't use it, it shows that we've planned ahead. By contrast, going into unauthorised overdraft suggests that we're not managing our money very well, particularly if it happens fairly often.

How do I apply for an overdraft?

Many banks and building societies offer new customers the chance to apply for an overdraft when they're opening a new account, in which case it's simply a matter of stating that we'd like to be considered and stating how much we'd like to be able to borrow.

There's no guarantee that a request will be successful, however, as it depends on the result of the credit check. The bank will look in particular at whether we have, or have had, any other planned or unplanned overdrafts, other lines of open credit, and how we're dealing with any debts we have. Depending on their assessment, we may be granted the full overdraft we've asked for, turned down, or offered an overdraft with a lower limit.

Can I get a free overdraft?

Most current accounts now come with a "buffer" facility, which allows us to go a little overdrawn without facing penalty charges or having a scheduled payment fail. This is not the same as having an authorised overdraft, which must be applied for and approved by the bank.

In general, only students and graduates will be able to find a good range of accounts offering truly free overdrafts. The limits are generous, but there are still penalties for going over them - and once a student has graduated they may find they're expected to pay back their overdrafts in as little as a year, although up to three is more common.

For the rest of us, there are several current accounts that aim to attract new customers with the offer of a fee-free overdraft for an introductory period, ranging from a few months to a year. There are also a few current accounts that offer genuinely free overdraft facilities, but only for fairly low amounts; these accounts are considered premium, so expect them to come with a monthly fee or to require a significant minimum monthly deposit.

How much will an overdraft cost me?

There shouldn't be any charge to apply for an overdraft, or for having an agreed overdraft in place but not using it. If we need to use the facility, however, it will almost always cost us. Some banks charge interest on the amount we borrow, calculated daily and collected monthly; others charge a daily fee. Some banks also charge an access fee for any month when we need to use the overdraft.

Be careful with current accounts that claim to offer "interest free" overdrafts, as they're likely to levy daily and/or monthly fees for them instead. The appeal of a flat fee is that the cost of borrowing is much simpler to calculate than when percentage rates are involved.

While they are much simpler to work with, however, flat fees can be much more expensive depending on how much or how often we need to borrow, particularly if there's a monthly access fee involved. Also check if the account in question offers a monthly cap on overdraft charges, but be aware that this can still result in high monthly costs.

For more on overdraft charges see this guide.

Can I switch if I already have an overdraft?

As different banks charge different rates and fees for their overdrafts, moving to an account that offers one more suited to our needs can save us a lot of money. As long as we've stayed within our agreed overdraft limits and have a reasonably good credit history, we should be able to move to another bank with a better overdraft.

It's worth double checking what we're already paying in rates and fees, and getting proof of the overdraft limit - this can usually be found on an account statement. Then when we've found an account that suits us better, use the current account switching service to move, as most banks will ask how big an overdraft we have or need – and often they'll offer to match whatever we already have.

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