Compare Bank Accounts with Overdrafts
- A good overdraft facility on your bank account can be a huge advantage in times of financial difficulty and save you money on penalty charges
- Compare accounts with overdrafts available from the major high street banks and internet providers below
- Compare up-to-date information on account features to find your ideal account
What type of current account are you looking for?
- Speedy set up in minutes. No paperwork, monthly fees or branch visits
- 24/7 support via phone, email or in-app chat
- Save smarter with Goals, the digital change jar to put money away for the stuff you need
Eligibility / Restrictions
- Must be a UK resident
- Cash deposit facilities via Post Office branches
- Cheque deposit facilities via app or post
- Contactless debit card to make payments easier
- Stay in control of your account with free text alerts
- Track your spending and manage your accounts and payments easily using the Barclays app
Eligibility / Restrictions
- Apply online for an account if you are 18 or older, not in full-time education and are a UK resident with a regular income or salary that you pay into your account
- You need to be 18 or over to access this product or service using the app. T&Cs apply.
- Overdrafts are subject to application, financial circumstances and borrowing history.
- Access to a 1.00% AER Regular Saver Account.
- £250 interest-free overdraft (subject to status)
- 24/7, 365 banking - Online, Phone and on Mobile
Eligibility / Restrictions
- Must be a UK resident aged 18+ with a phone number and email address
- No bankruptcy or IVAs in the last 6 years
- Pay in cash and cheques at HSBC branches and the Post Office
- Earn up to £60 annually, on-going £5 Cashback every month, with 30 debit card payments per calendar month*
- Zero TSB card charges abroad. ATM operators/foreign banks may charge & sellers may apply a currency conversion fee on purchases
- Savings Pot, Save the pennies and Auto Balancer features
Eligibility / Restrictions
- *Eligible for Cashback, if you open a new Spend & Save Plus account, including changing from an existing TSB account (Direct Debits and withdrawals not included)
- Up to £100 interest-free arranged overdraft available subject to status
- UK residents, 18+ only
- Earn up to £30 cashback: £5 per month for 6 months, with 30 debit card payments per calendar month*
- Saving Pots, Save the Pennies and Auto Balancer features
Eligibility / Restrictions
- *Eligible for Cashback if you open a new Spend & Save account, including changing from an existing TSB current account, other than from a Classic. Direct debits and withdrawals not included.
- UK residents only, 18+
- Assumed arranged overdraft of £1200: 39.9% APR representative variable. Subject to application, approval & repayable on demand
- Earn up to 3% cashback every month on selected Household bills paid by Direct Debit, capped at £5 for each cashback tier each month
- Manage your account online or via mobile app
- Get access to a range of 123 offers
Eligibility / Restrictions
- To be eligible you must pay a minimum of £500 into your account each month; have 2 active Direct Debits and be over 18 years and live in the UK permanently
- There is a £2 monthly fee for maintaining the account that will automatically be taken from your account each month
- Log onto Online or Mobile Banking at least once every 3 months. You accept that this is a paper-free account, so documents, statements and some letters will be sent to your secure inbox in Online Banking
- Get an arranged overdraft of at least £1,000 when you open an account
- Access to a Regular Saver account
- No monthly fee
Eligibility / Restrictions
- You must be 18 or older and live in the UK or EU
- To be eligible for HSBC Advance, customers will need to pay in a minimum of £1,750 per month or £10,500 over 6 months and be approved for an overdraft of £1,000+.
Please note: Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. You can use the options above the table to order it according to various criteria.
Award-winning comparisons you can trust
It's always nice to know you're on the right track. Over the years, as we have striven to improve the services we provide to our clients and users, we have been pleased to receive recognition for our efforts from both industry and consumer bodies.
How does an overdraft work?
An overdraft comes into play once the balance in your current account hits £0. Once you go below £0, you are ‘overdrawn’.
What happens next, however, is dependent on whether or not you have an arranged overdraft account.
An arranged overdraft has a set limit and interest rate agreed between you and your banking provider. If you have an arranged overdraft, you can borrow up to your approved limit and will pay interest on the amount you have borrowed until it is cleared.
If you don’t have an arranged overdraft, then you may be able to access an unarranged overdraft. This is when there isn’t enough money in your account to cover a transaction but the payment is allowed to go through by your bank nonetheless. It can also include going beyond the agreed limit of your arranged overdraft.
This will usually incur unarranged overdraft usage fees. Most banks will have a maximum monthly charge, the size of which will differ from provider to provider.
Not every bank account has an unarranged overdraft function. If it doesn’t, the bank will instead look to reject or refund the transaction in question.
Benefits of a bank account with an overdraft
There are a number of benefits to having a bank account with an overdraft.
- You can avoid missing payments that could incur penalty charges and/or negatively impact your credit score.
- Immediate access to extra funds if you need them.
- Overdrafts only kick in when you need them - this makes them different to, and potentially cheaper than, personal loans.
- Unlike other forms of borrowing, there is not usually a charge attached to paying an overdraft off early.
Disadvantages of a bank account with an overdraft
There are also disadvantages to having a bank account with an overdraft.
- Overdrafts offer smaller amounts of available money than personal loans or most credit cards, meaning it might not be suitable for your needs.
- Interest rates can be higher than other methods of borrowing.
- An overdraft isn’t guaranteed once you have one - your bank can withdraw it at any time.
- If you borrow more than your arranged overdraft limit, it could negatively impact your credit score
Bank accounts with free overdrafts
Since April 2020, banks are not allowed to charge a fee simply for having an overdraft. In this sense, having a bank account with an overdraft is now ‘free’.
In terms of interest, it is possible to find bank accounts that offer a 0% arranged overdraft rate on a certain portion of your overdraft limit. You would then pay interest on anything over that stated amount.
To find and compare the bank accounts with free overdrafts, take a look at the product table on this page.
What you need to know before getting an overdraft
There are a few things you should become familiar with before applying for or using an overdraft.
When looking to choose a current account with an overdraft, you should compare the arranged overdraft rate of each option.
To do so, you can look at the EAR (effective annual rate) or the representative APR (annual percentage rate) on each account for a direct comparison.
If you go into an unarranged overdraft, you will normally be charged interest at the effective annual rate attached to the type of account you are using. You may also incur an unpaid transaction fee.
These interest rates vary from account to account and provider to provider, but can be as high as 40%.
Setting up alerts
Banking providers are required to alert you, be it via a text or a mobile banking app, if you are about to slip into an unarranged overdraft.
Therefore it is important to make sure that your details are correct and up to date.
You can also set up email, text or push notification alerts to notify you of when you are about to go into your arranged overdraft.
Many bank accounts with an overdraft have an ‘interest-free buffer’. That is an amount of your overdraft that you won’t pay interest on or be charged a fee for, designed to cover the odd unforeseen transaction without charge.
This can differ from overdraft accounts that offer 0% interest on a larger portion of your overdraft limit. The types of accounts that offer 0% on a larger amount of funds will typically be for a limited time or only available given you meet certain requirements so always check your individual account T&C’s.
Managing your overdraft through an app or online
It is important to keep on top of your overdraft, and make sure you pay it off as soon as you can.
The dedicated banking app or online login associated with your account will allow you to manage your overdraft with ease.
Am I guaranteed to get a bank account with an overdraft?
You are not guaranteed to get a bank account with an overdraft. Each provider has its own rules for who is eligible for an overdraft.
You may be able to check your eligibility for an overdraft on the website of the banking provider in question.
Can I get an overdraft if I have bad credit?
When you apply for an overdraft, a bank will do a soft credit check. Therefore if you have bad credit, you may find it difficult to get a current account with an overdraft.
If you do have bad credit, you could instead consider ways to improve your score before applying for an overdraft.
» MORE: How to improve your credit score
How much overdraft can I get?
Overdrafts can range from small amounts like £10 or £25, to thousands of pounds.
The size of your overdraft limit will be dependent on a number of factors, including the type of current account you have or are looking to open, and your financial health, based on your income and credit history.
How to apply for an overdraft
There are a few different ways you can apply for an overdraft, depending on your circumstances.
How to get an overdraft on your current account
If you already have a current account, you can usually apply for an overdraft on that account via your banking app or online login. If you want to talk to someone about your decision, you can also apply in person at a branch or over the phone.
How to switch to a current account with an arranged overdraft
If you are eligible, and want to switch to a current account with an arranged overdraft, then you can use the free Current Account Switch Service via your banking provider.
This service will switch your payments and transfer your balance to your new account, and take care of closing your old account.
How to open a new account with an overdraft
First you will need to apply for a current account.
Use our NerdWallet comparison page to work out which current account with an overdraft you want, and then follow the steps as set out by your chosen provider.
During the process you will be asked if you would like to set up an overdraft. This will require proof of address (usually for the last 3 years), employment and income details, and a successful credit check.
Alternatives to an overdraft
Overdrafts should only be used to cover short-term financial emergencies. If you need more help, then you should consider other borrowing options. These could include credit cards or personal loans.
» MORE: Loan, overdraft or credit card?
How does Nerdwallet’s overdraft account comparison work?
Our comparison table shows four key features related to each current account with an overdraft. These are, moving left to right:
- Monthly Fee
- Interest Rate
- Arranged Overdraft Rate
- Minimum Monthly Credit
You can sort the table by all four of these metrics, as well as by Featured Product and Company A-Z.
The most relevant when searching for an overdraft account is the Arranged Overdraft Rate.
Each deal also has a representative example of an arranged overdraft, including the EAR and representative APR.
Overdraft Bank Accounts FAQs
Is it bad to use an overdraft?
It is not bad to use an overdraft. However, they should only be used for short-term emergencies, rather than as a long-term solution to financial difficulties.
It is important to stay on top of your overdraft, and try to avoid going into an unarranged overdraft as best you can.
Does an overdraft affect my credit score?
If managed well - that is, staying within your overdraft limit, and regularly paying it off - having an overdraft may mean lenders look at you more positively when it comes to applying for future borrowing.
However, repeatedly falling into an unarranged overdraft will start to harm your credit score.
When it comes to applying for an overdraft, or applying to increase your overdraft limit, most banks will do a soft credit check that won’t affect your score.
Yet some may do a hard search, which will be visible on your credit report. By itself, this won’t necessarily hurt your credit score. But a lot of overdraft applications in a short space of time will.
Can I switch bank accounts if I’m in my overdraft?
If you are within your arranged overdraft, but have a good credit history, you should be able to switch bank accounts.
However, you will still need to pay off the existing balance on your old account. And your new bank may not automatically give you an overdraft.
Can I get a joint bank account with an overdraft?
Yes, you can get a joint bank account with an overdraft.
Before that, you should make sure that you trust the person you are opening the account with, as all account holders are liable for paying off an overdraft.
What’s an overdraft ‘buffer’?
An overdraft buffer is an amount of money in your arranged overdraft that you won’t pay any interest on or be charged for. This could be anything from £10 to £250 depending on your account.
Can I close a bank account when overdrawn?
No, you will not be able to close a bank account until you have paid off your overdraft.
When do I need to repay my overdraft?
Overdrafts don’t usually have a time limit on borrowing but could cost you each month you have an outstanding balance. In addition, if you have an overdraft balance, you owe the bank money and, in theory, they could request this back at any time. However, this is unlikely to happen unless you repeatedly exceed your limit, for example.
How to pay off an overdraft?
To pay off your overdraft, you will need to move the amount of money you owe into the current account in which you are overdrawn.
This could be a case of budgeting and making small payments bit-by-bit, or paying it off all at once.
What should I do if I am struggling to pay off my overdraft?
If you are struggling to pay off your overdraft, then there are a number of steps you can potentially take.
These include: Creating a budget and repayment plan. Contacting your bank for advice and support. Moving your overdraft to an interest-free overdraft. Dipping into your savings. Using a 0% transfer credit card. Getting a low-rate personal loan.
Can I get a business bank account with an overdraft?
Yes, you can get a business bank account with an overdraft. These will often have far larger limits than a personal account overdraft.
Like with personal overdrafts, business overdrafts should only be used for short-term emergencies or unexpected expenses.
Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more
Barclays Current Accounts
A range of current account products with varying features, costs and benefits are available from one of the UK's best-known banks.Read more
CardOneMoney Current Accounts
A basic account provider offering products to all types of customer with no credit checks – previously known as CardOneBanking,Read more
Cashplus Current Accounts
Prepaid bank accounts with a choice of pricing plans.Read more
first direct Current Accounts
The online banking arm of HSBC offering a straightforward online current account.Read more
HSBC Current Accounts
Current accounts of all shapes and sizes to suit all types of customer available from one of the UK's biggest banks.Read more
Santander Current Accounts
Santander offer range of current accounts to personal customers including a number of products with cashback schemes.Read more
Starling Bank Current Accounts
Starling Bank is an app-based banking specialist offering straightforward accounts that can be entirely managed from your mobile phone.Read more
thinkmoney Current Accounts
Basic banking accounts with budgeting features from online/app-based provider.Read more
TSB Current Accounts
TSB offer a comprehensive range of day-to-day banking options with products to suit all types of customer.Read more
Not found what you are looking for?