A bank account with an overdraft lets you carry on spending, even after your balance reaches zero. This means that when you withdraw cash, buy something, or pay bills, you're borrowing money from the bank.

You pay the money back later. Sometimes overdraft charges are added on.

Use the comparison table above to find a bank account with an overdraft online.

How to find the best current account with an overdraft

When searching for the best current account with an overdraft, you need to compare:

  • Overdraft limit: This is the maximum you can borrow.

  • Interest rate: This is charged by the bank on the amount of money you owe. The higher the rate, the more interest you pay.

  • Overdraft charges: Some bank accounts charge a fee as well as (or instead of) an interest rate. You usually have to pay this annually, or every month you use the overdraft.

  • How much is free: Some accounts come with an interest-free overdraft up to a certain limit, like 250. Some offer a smaller, interest-free buffer of around 5 to 25.

A comparison will help you find the best current account with an overdraft. Then you can apply for it, open it and get approved for an overdraft facility online. It only takes a few minutes to apply for a bank account with an overdraft online or in a bank branch.

How does a bank overdraft work?

Most bank accounts come with an overdraft facility. If you had no money left in your bank account with an overdraft, and then spent 5, you'd have a negative balance of -5. This is called being overdrawn.

There are two types of overdraft. One's an authorised overdraft, sometimes known as an agreed or arranged overdraft. The other is an unarranged overdraft, which is sometimes called an unauthorised or unplanned overdraft.

An arranged overdraft is when your bank gives you an overdraft limit when you open the account. For example, if your overdraft limit was 500, you'd be able to spend 500 even when you'd spent all the cash in your account.

An unarranged overdraft is when you don't have an overdraft facility, but you keep spending even when your money's run out. It can also be when you've spent beyond your agreed overdraft limit. The overdraft charges on an unarranged overdraft are usually a lot higher than on an arranged overdraft.

What's my overdraft limit?

Your overdraft limit means how much you can spend after your bank balance reaches zero. For example, if you have an arranged overdraft limit of 500, your balance can reach -500.

You should be aware that some bank accounts let you keep spending past your arranged overdraft limit. Any extra you spend is counted as an unarranged overdraft. So you may have to pay additional overdraft charges, with a higher interest rate.

Deciding on your overdraft limit

When you apply for a bank account with an overdraft, the bank checks your income and credit record. This helps them decide whether to give you a bank account and how big your overdraft will be. The better your credit record, the higher your overdraft facility will be. The ban will then confirm what overdraft amount they are willing to give you.

Once your current account with an overdraft is open, you should be able to start using it straight away. Some banks let you increase your overdraft facility after a few months if you stay within the limit.

Checking your overdraft

If you want to check your overdraft limit, just ask your bank. Or, you could sign into your online banking, or check the paperwork you got when you opened your bank account with an overdraft.

If you need to see how much you owe on your overdraft, you can check your bank balance online, in the branch, by phone or at an ATM.

Most banks also offer text message or email alerts that tell you when your balances goes below a certain point. This can help you keep track of when you're near your overdraft limit.

Can I get a guaranteed bank account with an overdraft?

There's no bank that offers a guaranteed bank account with an overdraft to everyone. Every bank has set rules on who their bank accounts with overdrafts are suitable for. When you apply for a bank account with an overdraft, the bank checks your credit record before they decide whether to give you one.

Some bank accounts do come with a guaranteed overdraft, but they won't accept everyone for one of these accounts. These overdrafts might be as small as a 10 buffer, or could be around 500.

Can I get a current account with a free overdraft?

Yes - some bank accounts offer a free overdraft. This means you can borrow money through an overdraft up to a certain limit without paying any interest. As long as you stay within your limit, you won't get any overdraft charges.

You can compare free overdrafts here.

How much will my overdraft cost if it's not free?

Most overdrafts are not free. Fees for using overdrafts vary, so it's best to check the details with your bank.

Overdraft charges are taken from your bank account. If your balance was already 1,000 and you were charged 20, your new balance would be -1,020.

There are different types of fees that you might receive for your overdraft. These include:

  • Interest: This is charged monthly. It's only charged on the amount of money you owe, for as long as you owe it.

  • Daily fee: This is charged daily until you pay back what you owe. Sometimes the fee relates to how much you owe, and sometimes it's capped at a specific amount.

  • Weekly fee: This is like a daily fee, but it's charged weekly.

  • Monthly fee: This is a set monthly charge for an agreed amount of overdraft.

  • Arrangement fee: This is a one-off payment when you first set up or use your overdraft.

  • Transaction fee: If you're using an unarranged overdraft, you may be charged an extra fee every time you spend on your account.

Overdrafts for people with a poor credit score

If you want a bank account with an overdraft for bad credit scorers, you're likely to struggle to find one.

There are a few things you can do to help improve your chances of being accepted for a current account with an overdraft if you have a bad credit record. You could speak with the bank or ask for a smaller overdraft limit. Or you could switch banks or try to improve your credit rating. Also remember to shop around, as every bank has different requirements.

You can read about bank accounts for bad credit here. But remember that in most cases, a bank account with overdraft for people with bad credit scores isn't an option.

How does an overdraft affect your credit score?

An overdraft is a way of borrowing money from your bank, so it'll show up on your credit record, just like a credit card or loan would.

If you apply to borrow money - perhaps a mortgage or a credit card - the bank will check your credit record before they decide whether to lend it to you. If you owe too much on a bank account with an overdraft or have an unarranged overdraft, you might not be accepted.

Switch bank accounts with an existing overdraft

If you're in your overdraft and you're being charged for it, switching to a different account could save you money.

Switching means you'll stop paying interest and other charges on your account. You'll also get months or years more to pay off the balance, without fees.

It's quick and easy to switch bank accounts. If your overdraft is big, you'll need to find a bank account with an overdraft of the right size. Here's how to switch to another bank account.

Overdraft bank accounts FAQs


When is my overdraft limit confirmed?


Usually when your application is accepted, after the bank has run a credit check. Some confirm your limit a few days after.


What is the easiest bank account to open with an overdraft?


Most banks have a similar application process online or in their branches. It usually only takes a few minutes to apply.


What is the maximum I can be charged for using an overdraft?


Banks often set a cap on the total charges each month, e.g. 80, if they charge daily fees.


Can I switch accounts if I am in my overdraft?


Yes, some banks let you if the overdraft they offer is for the same amount you have already. Here is how to switch your overdraft to a new bank.


Can I get an interest free overdraft with my student account?


Yes, student accounts usually come with a free overdraft. Compare student bank accounts here.


How can I keep an eye on my overdraft?


You can check your balance online, using the bank's app, at an ATM or by asking them. You can also set up balance alerts by text or email.


Can I get an overdraft for my business?


Yes, some banks offer business current accounts with an overdraft.
You can compare business bank accounts here.

About our current accounts comparison


Who do we include in this comparison?


We include every personal & premium current account with an overdraft in the UK, except for student and children's accounts. We also include private bank accounts with an overdraft from our panel. They are all regulated by the Financial Conduct Authority (FCA). Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.