Can I switch current accounts when I am overdrawn?

Yes, many banks will allow you to switch accounts even if you're overdrawn. You're likely to find it easier if you have a good credit score and you've stayed within your overdraft limit. Many banks will also match your existing overdraft limit, provided you have proof of the amount.

Can my bank withdraw my overdraft?

Yes, your bank can remove your overdraft at any point - it is not guaranteed. However, if your bank cancels your overdraft without warning and you are charged as a result, you might have grounds to complain.

How much will I be charged for my overdraft?

The amount of interest charged will depend on the account - interest rates can range from 0% up to 40%. For this reason, it's crucial that you shop around carefully.

What are the alternatives to using an overdraft?

If you need to borrow funds, you could consider a 0% purchase credit card that will allow you to spread the cost of your spending interest-free for a set number of months. Be sure to clear your balance before the 0% deal ends and interest kicks in. If you need to borrow a larger sum, a personal loan will likely be the better option. Personal loans allow you to borrow a pre-agreed sum of money to be repaid over a number of years - usually between one and seven. Monthly repayments are fixed with interest charged on top.

What if I don't want an overdraft at all?

Look for an account that only gives you one if you apply for it (there are plenty). But make sure you're aware of what happens if you overspend - you're usually charged a fee if a payment is refused due to lack of funds.

Will using an overdraft impact your credit score?

Yes, as you are borrowing money from your bank, an overdraft will affect your credit score in the same way as any other form of borrowing. An overdraft will appear on your credit report as a debt, which means lenders will be able to see you have an overdraft, along with how much of it you are using. Provided you don't exceed your overdraft limit and you regularly pay it off, it shouldn't have a major impact on your credit score. In fact, if used sensibly, it could actually improve your credit score as it can indicate to lenders you are a reliable borrower. However, if you regularly go over your overdraft limit, your credit score could be negatively affected as it could suggest you're struggling financially. Learn more about overdrafts and credit scores.

What rules do banks have to follow on overdrafts?

Following a rule change in April 2020, banks can only charge a flat rate of interest on overdrafts, and they can no longer charge monthly or daily fees. They are also no longer able to charge more for unarranged overdrafts than arranged overdrafts. The rules were introduced to make it easier for customers to compare overdraft interest rates between providers and to remove the very high fees being charged on unarranged overdrafts.

How much overdraft can I get?

The size of your overdraft will depend on a range of factors including your credit rating, your income and any other debt you have. The better your credit score and the more you earn, the higher your overdraft is likely to be. If you are offered a smaller overdraft than you would like, you may be able to extend it after some time, providing you have managed your bank account sensibly.

What are interest-free buffers?

Some bank accounts offer a small, interest-free overdraft limit known as a buffer. These can be handy if a payment unexpectedly and temporarily takes you into your overdraft, for example, as you won't be charged interest on the amount borrowed.

Best bank accounts with cheap or free overdrafts UK 2026

Compare accounts Compare deals

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.

15 of 137 results

Finder Score	Account fees	Funding requirement	Interest (AER)	Arranged overdraft	Incentive	Representative example
9.8Excellent TSB Spend & Save Plus	9.8Excellent	£3 per month	No minimum funding requirement	0% AER	0% EAR variable on the first £100 and then 39.9% EAR variable	Earn up to £60 cashback annually - ongoing £5 cashback every month with 20 debit card payments per calendar month (excludes cash withdrawals).	18+ and UK residents only. Other T&Cs apply. Representative example: Assumed arranged overdraft of £1,200. 0% EAR variable on the first £100. Annual interest rate 39.9% EAR variable, 40.1% APR representative (variable). How does this overdraft compare? Representative Annual Percentage Rates (APRs) help you compare the cost of using your overdraft.	Go to site More info Compare product selectionCompare	loading
8.4Great Royal Bank of Scotland Select Account	8.4Great	£0	No minimum funding requirement	0% AER	39.49% EAR variable (subject to status)	£200 offer when you switch to Royal Bank of Scotland. T&Cs apply. More info For £200, open a Select or Reward account and switch using the Current Account Switch Service. Pay in £1250 & log into the app within 60 days. You must not have held a current account on 06/05/26 or previously received an offer from NW Group. T&Cs & account criteria apply. Fees may apply. May be withdrawn at any time.	You must be 18+ and a UK resident. 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? A good way to compare the cost of borrowing products is by using APR, which show the cost of borrowing over the year.	Go to site More info Compare product selectionCompare	loading
9.8Excellent Starling Current Account	9.8Excellent	£0	No minimum funding requirement	0% AER	15% EAR variable	There is no charge from Starling for overseas debit card transactions Representative Example: Effective Annual Rate: 15.00% EAR (variable). Representative APR: 15.00% APR (variable). Assumed credit limit: £1,200 Subject to status. How does this overdraft compare? A good way to compare the cost of borrowing products is by using APR, which show the cost of borrowing over the year.	Go to site More info Compare product selectionCompare	loading
Not yet rated NatWest Student Account	Not yet rated	£0	No minimum funding requirement	0% AER	N/A	Representative example: If you use an arranged overdraft of £1,200, you'll be charged.	More info Compare product selectionCompare	loading
Not yet rated Royal Bank of Scotland Student Account	Not yet rated	£0	No minimum funding requirement	0% AER	N/A	Representative example: If you use an arranged overdraft of £1,200, you'll be charged.	More info Compare product selectionCompare	loading
8.8Great Nationwide Building Society FlexPlus	8.8Great	£18 per month	No minimum funding requirement	0% AER	0% EAR variable on the first £50 and then 39.9% EAR variable	Free travel accident insurance – covers account holder and family (also when travelling independently).	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 0% EAR variable on the first £50 and then 39.9% EAR variable. Account fee of £18 per month.	More info Compare product selectionCompare	loading
Not yet rated Nationwide Building Society FlexDirect => £1,500 per month Cashback	Not yet rated	£0	£1500 per month	5% AER	0% EAR variable on the first £50 and then 39.9% EAR variable	£175 switch offer. T&Cs apply.	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 0% EAR variable on the first £50 and then 39.9% EAR variable.	More info Compare product selectionCompare	loading
Not yet rated TSB Student Account	Not yet rated	£0	No minimum funding requirement	5% AER	N/A	Representative example: If you use an arranged overdraft of £1,200, you'll be charged.	More info Compare product selectionCompare	loading
9.3Excellent Lloyds Bank Lloyds Premier Cashback	9.3Excellent	£0	£5000 per month	1.5% AER	0% EAR variable on the first £100 and then 29.9% EAR variable	£200 switch offer. T&Cs apply.	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 0% EAR variable on the first £100 and then 29.9% EAR variable.	More info Compare product selectionCompare	loading
8.4Great Virgin Money M Plus Account Cashback	8.4Great	£0	No minimum funding requirement	1% AER	19.9% EAR variable	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 19.9% EAR variable.	More info Compare product selectionCompare	loading
Not yet rated Bank of Scotland Vantage Classic Account Cashback	Not yet rated	£0	£1000 per month	0.75% AER	29.9% EAR variable	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 29.9% EAR variable.	More info Compare product selectionCompare	loading
9.8Excellent Club Lloyds Cashback	9.8Excellent	£0	£2000 per month	0.75% AER	0% EAR variable on the first £100 and then 29.9% EAR variable	£200 switch offer. T&Cs apply.	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 0% EAR variable on the first £100 and then 29.9% EAR variable.	More info Compare product selectionCompare	loading
Not yet rated Bank of Ireland UK 3rd Level Student Account	Not yet rated	£0	No minimum funding requirement	0.5% AER	N/A	Representative example: If you use an arranged overdraft of £1,200, you'll be charged.	More info Compare product selectionCompare	loading
Not yet rated Ulster Bank Private Current Account	Not yet rated	£0	No minimum funding requirement	0.01% AER	19.49% EAR variable	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 19.49% EAR variable.	More info Compare product selectionCompare	loading
9.5Excellent Barclays Premier Current Account Cashback	9.5Excellent	£0	No minimum funding requirement	0% AER	0% EAR variable on the first £500 and then 35% EAR variable	£450 switch offer. T&Cs apply.	Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 0% EAR variable on the first £500 and then 35% EAR variable.	More info Compare product selectionCompare	loading

Showing 15 of 137 results

Finder Score for bank accounts

To make comparing even easier we came up with the Finder Score. Fees, features and customer service across 20+ of the most popular banks are all weighted and scaled to produce a score out of 10. The higher the score the better the account – simple.

Read the full methodology

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 for it. Overdrafts can turn out quite expensive, with many banks charging annual interest rates of around 40%, making it a more expensive option than many credit cards.

Some banks offer a 0% overdraft in order to entice new customers in, but this ‘free’ borrowing facility usually lasts for a fixed period, or it only applies to a relatively small sum. For example, the First Direct 1st Account offers a £250 interest-free overdraft buffer. But if you exceed this amount, you’ll pay interest.

This means you should only use an overdraft as a short-term solution or in case of emergency. 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 what 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.

Overdraft charges

Before using your overdraft, you should make sure you’re fully aware of how much it’s going to cost you.

In April 2020, the government brought in major changes to the costs of overdrafts. This means that banks must only charge a simple annual interest rate (APR) on overdrafts, and cannot charge additional fees or higher rates for unarranged overdrafts, as used to be the case. The idea is that this makes it easier to compare charges between accounts.

Overdraft rates tend to range from 19% to 40% or more, with many at the higher end of the scale, so it’s crucial to compare carefully.

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 might give you an interest-free overdraft for a few months 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 but always make up for it the following month, 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 relying on your overdraft. A personal loan will probably be more suitable for your needs – and a lot cheaper.

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.
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

If you need to borrow funds, you could consider a 0% purchase credit card that will allow you to spread the cost of your spending interest-free for a set number of months. Be sure to clear your balance before the 0% deal ends and interest kicks in.
If you need to borrow a larger sum, a personal loan will likely be the better option. Personal loans allow you to borrow a pre-agreed sum of money to be repaid over a number of years – usually between one and seven. Monthly repayments are fixed with interest charged on top.
Yes, as you are borrowing money from your bank, an overdraft will affect your credit score in the same way as any other form of borrowing. An overdraft will appear on your credit report as a debt, which means lenders will be able to see you have an overdraft, along with how much of it you are using.
Provided you don't exceed your overdraft limit and you regularly pay it off, it shouldn't have a major impact on your credit score. In fact, if used sensibly, it could actually improve your credit score as it can indicate to lenders you are a reliable borrower.
However, if you regularly go over your overdraft limit, your credit score could be negatively affected as it could suggest you're struggling financially. Learn more about overdrafts and credit scores.
Following a rule change in April 2020, banks can only charge a flat rate of interest on overdrafts, and they can no longer charge monthly or daily fees. They are also no longer able to charge more for unarranged overdrafts than arranged overdrafts.
The rules were introduced to make it easier for customers to compare overdraft interest rates between providers and to remove the very high fees being charged on unarranged overdrafts.
The size of your overdraft will depend on a range of factors including your credit rating, your income and any other debt you have. The better your credit score and the more you earn, the higher your overdraft is likely to be.
If you are offered a smaller overdraft than you would like, you may be able to extend it after some time, providing you have managed your bank account sensibly.

Finder writers are subject matter experts and use primary sources, in-depth research and interviews with other experts to ensure you're getting accurate, up-to-date information. Articles are fact checked in line with our editorial guidelines.
1. Finder UK overdraft statistics

Our “Best for” picks highlight top options in specific categories based on our independent evaluation (see our full methodology), while “Promoted” tags indicate sponsored placements. Selected products may not suit everyone. We track selected market offers, which may not cover every product. Products are listed in no particular order unless specified, and inclusion or ordering may be influenced by popularity or commercial agreements. Most comparison table data is provided by Defaqto or sourced directly from providers. Always evaluate your own circumstances and consider independent advice before making major financial decisions.

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Written by

Valentina Cipriani

Writer

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Valentina Cipriani was a writer at Finder UK. She wrote news, features and guides about banking and credit cards, helping people to improve their financial lives. She holds an MA in International Journalism. See full bio

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Rachel Wait

Writer

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio

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Best bank accounts with cheap or free overdrafts in the UK 2026

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.

Finder Score for bank accounts

What is an overdraft?

Arranged vs unarranged overdrafts

How to apply for an overdraft

Overdraft charges

Is a current account with an overdraft a good idea?

Can you switch current accounts with an overdraft?

How to compare bank accounts with overdrafts

Alternatives to overdrafts

Pros and cons of a bank account with an overdraft

Pros

Cons

Bottom line

Frequently asked questions

Valentina Cipriani

Rachel Wait

More guides on Finder

Best bank accounts with cheap or free overdrafts in the UK 2026

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.

Finder Score for bank accounts

What is an overdraft?

Arranged vs unarranged overdrafts

How to apply for an overdraft

Overdraft charges

Is a current account with an overdraft a good idea?

Can you switch current accounts with an overdraft?

How to compare bank accounts with overdrafts

Alternatives to overdrafts

Pros and cons of a bank account with an overdraft

Pros

Cons

Bottom line

Frequently asked questions

Can I switch current accounts when I am overdrawn?

Can my bank withdraw my overdraft?

How much will I be charged for my overdraft?

What are the alternatives to using an overdraft?

What if I don't want an overdraft at all?

Will using an overdraft impact your credit score?

What rules do banks have to follow on overdrafts?

How much overdraft can I get?

What are interest-free buffers?

Sources

Valentina Cipriani

Rachel Wait

More guides on Finder

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