Best bank accounts with cheap or free overdrafts in the UK 2024

Overdrafts can be both really helpful or a true fee nightmare. If you use them often, it's worth looking for a bank account that prices them fairly.

Most current accounts come with an overdraft facility these days, either one that you have to apply for or it's included in the package. But should you use it? How much is it going to cost you? How do you compare? We've looked into it so that you don't have to.

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Name Product Ratings Account fees Funding requirement Interest (AER) Arranged overdraft Incentive Representative example Link
OFFER
Select Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
39.49% EAR variable (subject to status)
tag iconSwitch your current account to NatWest and you could earn £200 within 7 days of meeting eligibility criteria. T&Cs apply.
Current account switch service guarantee badge
Switch your current account held elsewhere to NatWest using the Current Account Switch Service to get the £200 offer. You must be 18+ and a UK Resident. Pay in £1250 & log in to the app within 60 days of switching. Offer may be withdrawn or amended at any time. Offer T&Cs and restrictions apply.
Representative Example: Effective Annual Rate: 39.49% EAR (variable). Representative APR: 39.49% APR (variable). Assumed credit limit: £1,200 Subject to status. How does this overdraft compare? Representative APRs help you compare the cost of different credit products.
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OFFER
Everyday Current Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
39.94% EAR variable
tag icon£185 cash when you switch to an Everyday Current Account. T&Cs apply.
Current account switch service guarantee badge
Switch incentive available when you use Current Account Switch Service. For £185 cash you'll have to complete a full switch to an Everyday Current Account, set up 2 active Direct Debits and pay in £1,500 within 60 days. T&Cs apply.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.94% EAR variable.
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Finder Award
OFFER
Current Account - Age 18 and over
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
3.24% AER
15% EAR variable
tag iconNo fees overseas plus refer a friend and earn a free National Trust day pass – redeemable at hundreds of the places it looks after.
Current account switch service guarantee badge
No fees for spending or withdrawing cash overseas - currencies are converted at Mastercard’s standard exchange rate
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 15% EAR variable.
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OFFER
Reward
Not yet rated
£2 per month
Min. £1250 Per Month
0% AER
39.49% EAR variable (subject to status)
tag icon£200 offer when you switch + earn up to £5/month back in Rewards. £2/month fee, T&Cs apply.
Current account switch service guarantee badge
Switch your current account held elsewhere to NatWest using the Current Account Switch Service to get the £200 offer. You must be 18+ and a UK Resident. Pay in £1250 & log in to the app within 60 days of switching. Offer may be withdrawn or amended at any time. Offer T&Cs and restrictions apply.
Earn up to £5/month back: £4 for +2 Direct Debits (each must be +£2) and £1 for each mobile app log in.
Representative Example: Effective Annual Rate: 39.49% EAR (variable). Representative APR: 39.49% APR (variable). Assumed credit limit: £1,200 Subject to status. How does this overdraft compare? Representative APRs help you compare the cost of different credit products.
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CASHBACK
Edge Current Account
Not yet rated
£3 per month
Min. £500 Per Month (Minimum two direct debit mandates on account per month)
0% AER
39.94% EAR variable
tag icon£185 cash when you switch to a Santander Edge current account. T&Cs apply.
Current account switch service guarantee badge
Switch incentive available when you use Current Account Switch Service. For £185 cash you'll have to complete a full switch to a Santander Edge current account, set up 2 active Direct Debits and pay in £1,500 within 60 days. T&Cs apply.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.94% EAR variable. Account fee of £3 per month.
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CASHBACK
Spend & Save
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
39.9% EAR variable
tag iconEarn £5 cashback a month when making 20 or more debit card payments each month..
Current account switch service guarantee badgeIf you use an arranged overdraft of £1,200, you'll be charged interest at 39.9% EAR variable/APR representative.
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OFFER
Premier Select
Not yet rated
£0
No minimum funding requirement
0% AER
Arranged overdraft available. Subject to eligibility.
tag iconSwitch your current account to NatWest and you could earn £200 within 7 days of meeting eligibility criteria. T&Cs Apply.
Current account switch service guarantee badge
Premier Eligibility: 18+, UK resident and meet one of the following criteria £100k income p.a., £100k saved or invested or £500k mortgage borrowings.
£200 switching offer: Switch your current account held elsewhere to us using the Current Account Switch Service to get our £200 offer. £200 could be paid within 7 days of meeting eligibility criteria. Offer terms, conditions and restrictions apply, Offer may be withdrawn or amended at any time. No monthly account fees. Other fees may apply.
Representative Example: Assumed arranged overdraft of £1,200. Effective annual interest rate 0% on arranged overdrafts up to £500, 19.49% EAR (variable) above £500. Representative 11.4% APR (variable). How does our overdraft compare? Representative APRs help you compare the cost of different credit products.
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Finder Award
OFFER
1st Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
N/A
tag iconGet access to a 7.00% AER/gross Regular Saver Account.
Current account switch service guarantee badge
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OFFER
Select Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
39.49% EAR variable (subject to status)
tag iconSwitch your current account to Royal Bank of Scotland and you could earn £200 within 7 days of meeting eligibility criteria. T&Cs apply.
Current account switch service guarantee badge
Switch your current account held elsewhere to Royal Bank using the Current Account Switch Service to get the £200 offer. You must be 18+ and a UK Resident. Pay in £1250 & log in to the app within 60 days of switching. Offer may be withdrawn or amended at any time. Offer T&Cs and restrictions apply.
Representative Example: Effective Annual Rate: 39.49% EAR (variable). Representative APR: 39.49% APR (variable). Assumed credit limit: £1,200 Subject to status. How does this overdraft compare? Representative APRs help you compare the cost of different credit products.
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Barclays Bank Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
35.0% EAR (Variable)
tag iconGet more from your everyday banking with Barclays Blue Rewards, with member deals and savings rates. (Eligibility, conditions and a £5 monthly fee apply).
Current account switch service guarantee badge

Available to UK residents 18 or over. Manage your money with the Barclays app, Online Banking and more. You must be 18 or over to access this product in the app. T&Cs apply.

Representative Example: If you use an arranged overdraft of £1,200, you will be charged 35.0% EAR (variable).

Representative APR: 35.0% (variable). Subject to application, financial circumstance and borrowing history.

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CASHBACK
Spend & Save Plus
Not yet rated
£3 per month
No minimum funding requirement
0% AER
N/A
tag iconEarn £5 cashback a month when making 20 or more debit card payments each month..
Current account switch service guarantee badge Account fee of £3 per month.
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OFFER
Reward
Not yet rated
£2 per month
Min. £1250 Per Month
0% AER
39.49% EAR variable (subject to status)
tag icon£200 offer when you switch + earn up to £5/month back in Rewards. £2/month fee, T&Cs apply.
Current account switch service guarantee badge
Switch your current account held elsewhere to Royal Bank using the Current Account Switch Service to get the £200 offer. You must be 18+ and a UK Resident. Pay in £1250 & log in to the app within 60 days of switching. Offer may be withdrawn or amended at any time. Offer T&Cs and restrictions apply.
Earn up to £5/month back: £4 for +2 Direct Debits (each must be +£2) and £1 for each mobile app log in.
Representative Example: Effective Annual Rate: 39.49% EAR (variable). Representative APR: 39.49% APR (variable). Assumed credit limit: £1,200 Subject to status. How does this overdraft compare? Representative APRs help you compare the cost of different credit products.
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Premier Current Account
Not yet rated
£0
Eligibility criteria applies. See below.
0% AER

Current account switch service guarantee badge
To be eligible for Premier Banking you’ll need to have either (1) an annual gross income of £75,000 or more paid into a Barclays current account or (2) a minimum of £100,000 saved or invested with Barclays.
Representative example: 0% interest (variable) payable on arranged overdrafts up to £500. If you use an arranged overdraft above this amount the annual rate of interest is 35.0% (variable). 19.5% APR Representative (variable), based on £1,200 overdraft balance. Overdrafts, including free amounts, are subject to application, financial circumstances and borrowing history.
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Current Account
Finder score
★★★★★
★★★★★
£0
No minimum funding requirement
0% AER
35.9% EAR variable
Current account switch service guarantee badge
Aged 16 or over, or 18 or over when requesting the optional overdraft. Subject to status and eligibility.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 35.9% EAR variable.
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CASHBACK
Santander Edge Up Current
Not yet rated
£5 per month
Min. £1500 Per Month (Minimum two direct debit mandates on account per month)
3.51% AER
39.94% EAR variable
tag icon£185 cash when you switch to a Santander Edge Up current account. T&Cs apply.
Current account switch service guarantee badge
Switch incentive available when you use Current Account Switch Service. For £185 cash you'll have to complete a full switch to a Santander Edge current account, set up 2 active Direct Debits and pay in £1,500 within 60 days. T&Cs apply
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.94% EAR variable. Account fee of £5 per month.
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What is an overdraft?

An overdraft is a feature of your current account that allows you to continue spending even once you’ve exhausted all your available funds.

Since you’re effectively borrowing money, you’ll usually be charged interest and/or a fee for it. Overdrafts can turn out quite expensive, with many account banks charging around 40% annual interest rates, making borrowing more expensive than via some credit cards.

Some banks offer a 0% overdraft in order to entice new customers in, but this ‘free’ borrowing facility usually last for a fixed period. For example, new Nationwide FlexDirect account customers can take advantage of a 0% for a year, subject to certain terms and conditions.

So you should only use yours in case of emergency. However, they can be handy if you need just a few extra quid to make it to the end of the month.

Most full current accounts come with an overdraft option included or allow you to apply for one. Learn more about the advantages and disadvantages of an overdraft.

Arranged vs unarranged overdrafts

There are two types of overdrafts:

  • Arranged overdrafts. That’s when you are approved for an overdraft. You’ll be able to borrow up to a set limit.
  • Unarranged overdrafts. That’s when you haven’t agreed to an overdraft with your bank and still overspend, or when you spend more than your overdraft limit.

How to apply for an overdraft

When you open a current account, many banks will give you the option of an overdraft. You can apply for it then or later on.

You can typically apply for an overdraft online or from your banking app. You’ll be asked the arranged overdraft limit you’d like and will usually be credit checked. If you pass (the credit limit you’re approved for may be lower than what you asked for), you’ll then be able to use your arranged overdraft. You can check your current credit score for free here.

Overdraft fees

As we said, before using your overdraft, you should make sure you’re fully aware of how much it’s going to cost you. There are different fees to take into account and they can quickly add up to a fairly significant sum.

In April 2020, the government brought in major changes to the costs of overdrafts, meaning that banks cannot charge higher fees for unauthorised overdrafts, as used to be the case.

This means that interest on all overdrafts is charged at a single annual percentage rate (APR). The idea is that this makes it easier to compare charges between accounts.

  • Fees for accessing an overdraft facility. This isn’t super common, but with some banks, you’ll be charged just for having an overdraft facility on your account, even if you don’t use it.
  • Fees for using overdrafts. You’re typically charged an interest rate levied on the amount you borrow, but this varies will vary from bank to bank, so make sure you check exactly how much you would owe, and over how long a time period, before dipping into your overdraft.

Is a current account with an overdraft a good idea?

In theory, there’s no harm in at least applying for an overdraft facility and having it on your bank account. It can be a life saver if something happens and you have to deal with an emergency. However, if you do it, you need to be aware of the catches:

  • It can be an expensive form of borrowing. Depending on the interest rate your bank offers, the interest can add up.
  • Be especially careful if you have more than one current account. If you spread your money between different accounts, you may accidentally end up using your overdraft even if you don’t actually need it.

Ultimately, it all comes down to how much your bank charges. There are current accounts out there offering decently priced overdrafts that can be really helpful if you need a bit of extra cash at times.

An overdraft can be a handy safety net, but keep a close eye on the costs so the debt doesn’t get out of control.”

Katherine Denham, award-winning personal finance expert

Can you switch current accounts with an overdraft?

Yes, you can. Having an overdraft won’t stop CASS (the current account switching scheme) from doing its thing and transferring your direct debits and payments to your new bank while closing your old account. If you had an overdraft with your old bank but weren’t using it, you don’t have to do anything except apply for an overdraft with your new bank if you still want it.

Things are a tad more complicated if you were using your overdraft and your old account was in debt. You have two main options:

  • See if your new bank will accept your overdraft. If it does, you’ll be able to transfer it directly from your old account. Just make sure you’re not getting yourself a worse deal.
  • Pay off your overdraft. If your new bank doesn’t agree to transfer your old overdraft, you’ll have to pay it off. Get in touch with your old bank to agree on how to do so. If money is tight, keep in mind that your new bank may still be willing to offer you an overdraft even if it doesn’t allow you to transfer your old one (it’s worth asking/applying).

It might be worth browsing the latest switching deals on the market at the moment to see if you can earn some extra money.

How to compare bank accounts with overdrafts

If you’re looking for a bank account with an overdraft, it’s important to consider how often you’re likely to use your overdraft and how much you’ll be charged for doing so.

Some bank accounts will offer an interest-free overdraft for the first 12 months, for example, which could be a good option if you only need it for a set period, or you have an existing overdraft you need to pay off.

Others, however, will offer a small interest-free buffer to act as a safety net as and when you need it. If you are likely to go over this buffer, make sure you compare exactly how much you’ll be charged for doing so and look for the most competitive option.

Alternatives to overdrafts

Overdrafts are definitely not your only option when it comes to borrowing:

  • Credit cards. If you often end up overspending one month only to make up for it the following one, getting a credit card can be much better than dipping into your overdraft. As long as you clear your balance in full every month, you won’t be charged any interest.
  • Personal loans. If you already know you’re going to have to borrow money in the near future, or are looking to fund a medium-to-long-term project, there’s really no point in relying on your overdraft. A personal loan will probably be more suitable for your needs.

Finally, if you find yourself overusing your overdraft, maybe the time has come to do a bit of budgeting and reorganise your finances. If it sounds like a daunting task, why not try a budgeting app?

Pros and cons of a bank account with an overdraft

Pros

  • Some overdrafts are interest-free up to a set limit.
  • If used sensibly, an overdraft can help improve your credit score.
  • Overdrafts are flexible, allowing you to borrow what you need when.
  • Overdrafts are quick to arrange.
  • There is no set repayment term.

Cons

  • Interest rates can be high and you might be charged fees on top.
  • If you regularly exceed your overdraft limit, this can negatively impact your credit score.
  • Your overdraft is not guaranteed and can be cancelled at any point.
  • Borrowing limits are usually lower compared to other forms of credit such as credit cards and loans.

Bottom line

An overdraft can be a handy addition to your bank account and can offer a valuable safety net in the event an unexpected payment pushes you into the red, for example. Applying for an overdraft is usually straightforward and there are a few low cost options available.

However, it’s important to stay within your overdraft limit and try to pay back the amount borrowed as soon as possible. Otherwise, the more you rely on your overdraft, the harder it will become to get out of it.

Frequently asked questions

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