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Current Accounts with overdraft

Compare current accounts with overdrafts today

  • Enjoy the flexibility of an overdraft with your account

  • See our wide range of accounts with overdrafts

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Our accounts with the highest overdrafts

Accurate as of Saturday, 18 May 2024

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Student 16-25 Railcard

Santander Edge Student current account

  • Switch Incentive

  • Arranged overdraft

    Yes (subject to eligibility)

  • Account fees

    None

  • Rewards and other perks

    Get cashback, vouchers, prize draws and other personalised offers


Important information & opening criteria
Account details:
  • Interest rate: 0% AER interest on in-credit balances
  • Overdraft: Up to £2,000 interest and fee-free arranged overdraft
  • Rewards: Get cashback, vouchers, prize draws and other personalised offers when you use Santander Boosts
  • Other Perks: Four year 16-25 Railcard worth £100 plus a total average saving of £728 (average saving of £182 per year)
Important information:
To be eligible for Santander Boosts, you must have a personal Santander debit or credit card, be 18 years or over and be registered for Online and Mobile Banking. Register for your railcard via Online Banking.
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5% interest on balances up to £500

Student Account

  • Switch Incentive

  • Arranged overdraft

    Yes (subject to eligibility)

  • Account fees

    None

  • Rewards and other perks

    Receive 5% AER/4.89% gross variable


Important information & opening criteria
Account details:
  • Interest rate: 5% AER interest on in-credit balances up to £500
  • Overdraft: Interest and fee-free tiered arranged overdraft
  • Other Perks: Receive 5% AER/4.89% gross variable interest on balances up to £500
Important information:
You can then apply to increase the overdraft to £1,000 in months seven to nine and from month ten up to £1,500 – helping you to manage your spending over your first year. UK resident 17+, Eligibility for overdraft: UK resident 18+
£175 cash when you switch to a Santander Edge current account. T&Cs apply
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£175 to switch + earn cashback every month on household bills and essential spend

Edge current account

  • Switch Incentive

    £175 to switch

  • Arranged overdraft

    Yes (subject to eligibility)

  • Account fees

    £3 /month

  • Rewards and other perks

    Earn 1% cashback on selected household bills


Important information & opening criteria
Account details:
  • Switch Incentive: £175 when you switch to a Santander Edge current account. T&Cs apply
  • Interest rate: 0% AER interest on in-credit balances
  • Overdraft: 0% arranged overdraft for first 4 months for switchers
  • Rewards: Earn 1% cashback on selected household bills and supermarket and travel spend (capped at £10pm)
  • Other Perks: Santander Edge saver 7.00% AER/6.78% gross (variable) on balances up to £4,000. No transaction fees outside the UK. T&Cs apply.
Important information:
Switch incentive available when you use Current Account Switch Service. For £175 cash you'll have to complete the full switch, set up 2 active Direct Debits and pay in £1,500 within 60 days. T&Cs apply. £3 monthly fee. You must be 18 or over and live in the UK permanently to open the account. To earn cashback, you must pay in £500 each month and set up 2 active Direct Debits.

This is a preview of the top three current accounts sorted by overdraft. For a full breakdown of all our current accounts, including alternative current account types, progress to the results table.

What is an overdraft?

An overdraft is a way of borrowing from your bank to spend more than you have in your current account. They can be useful to manage your finances, but could also prove expensive if used poorly.

You’ll go into your overdraft if you make a purchase or withdraw cash that takes you ‘below zero’ or in debit on the account. Depending on the type of current account you have, you may have to pay interest on the overdraft.

Some student current accounts come with an interest-free overdraft for several years, for example.

How much does an overdraft cost?

  • Interest-free: Interest-free overdrafts work like an interest-free loan, and you won’t face any charges for this borrowing. Some accounts offer an interest-free buffer on an agreed overdraft, usually up to £250, before implementing interest charges. Others, such as student or graduate accounts, might offer an interest-free agreed overdraft of up to £2,000

  • Agreed interest: If you’ve exhausted your bank balance and interest-free buffer (if you have one), your bank is likely to start charging you for using your overdraft at a set interest rate. In most cases, it will be interest charged on the amount you’ve borrowed over your interest-free limit.

How do overdrafts work?

Overdrafts are fairly simple to understand. The key points are as follows:

  • There are two types of overdraft: authorised and unauthorised. An authorised overdraft is where the bank has provided a specific facility for you to go overdrawn. This does not always mean it’s interest-free

  • Banks can only charge you an annual interest rate for both unarranged and arranged overdrafts, meaning you won't pay any additional fees or charges

  • But interest rates on overdrafts from banks and building societies can be high, ranging from 19% to 40% or more

  • Entering an unarranged overdraft can negatively impact your credit score. So if you're looking to borrow, apply for an arranged overdraft

  • If you don’t repay what you owe on time, you run the risk of damaging your credit score or building up significant debts

  • For student current accounts your overdraft is likely to be interest-free and you’ll be expected to pay it back within two to three years of graduating

What are the different types of overdraft?

  • Authorised overdraft

    An authorised (or arranged) overdraft is arranged with your bank, and usually comes with an agreed borrowing limit – this can be anywhere from £250 to £3,000. There may be a small arrangement fee.

  • Unauthorised overdrafts

    An unauthorised (or unarranged) overdraft is borrowing you haven’t agreed with your bank. You’ll go into an unauthorised overdraft if you go over your authorised overdraft limit or if you overspend when you don’t have an agreed overdraft with the bank.

What are the advantages and disadvantages of overdrafts?

  • Tick

    Pros

    • Flexibility: Unlike a loan, where you’ll borrow a set amount and repay over a fixed period, an overdraft gives you a way to borrow the exact amount you need immediately and repay when it suits you

    • No early repayment charge: You shouldn’t be charged a fee for paying back any amount of your overdraft at any time

    • Quick to apply for: There’ll be less paperwork than applying for a loan – often you’ll get an overdraft automatically with your current account application

  • Cross

    Cons

    • Less money to borrow: The amount of money you can access through your overdraft tends to be lower than with a personal loan

    • Interest charges: The interest charged on overdrafts can be high, which can make it an expensive way to borrow long term

    • Over-spending: Spending is coming out of your current account so if you don't keep an eye on your debit card use you could end up with a large overdraft that's hard to pay off (most banks will send text alerts if you're close to your overdraft limit)

How can I avoid going into my overdraft?

  • Plus

    Regularly check bank statements:

    Take a deep dive through your finances and think about what you could cut back on before you go overdrawn

  • Plus

    Set up text alerts

    Arrange a text alert with your bank when your balance drops below a certain amount. This can warn you you’re approaching your overdraft

  • Plus

    Speak to your bank

    If you’re aware you could enter into your unauthorised overdraft let your bank know. They might be able to extend your existing limit


  • Plus

    Start to save

    Consider setting up and regularly topping up an easy access savings account which could be used to clear an overdraft in an emergency situation

Does an overdraft affect my credit score?

Using your overdraft could affect your credit rating because lenders look at any outstanding debts when making lending decisions.

Your credit score is more likely to be negatively affected if you use an unauthorised overdraft or go beyond your agreed overdraft limit because lenders are likely to see you as managing credit poorly.

If you have an arranged overdraft but don’t use it (or use it occasionally but clear it quickly) this shouldn’t affect your credit score.

Credit score wheel

How to compare current accounts with MoneySuperMarket

We can take the hard work out of finding a current account to suit you by comparing a range of current accounts all in one place.

  • Browse our providers

    Click through to search the market to find the best current account for your needs, including any cash incentives to switch

  • Filter and sort

    Use our handy filters to narrow down your options based on the type of current account you need, such as high interest or student accounts

  • Click through to provider

    When you find the deal you want, click straight through to the provider to complete your application. Sit back while your new bank takes care of the switch

Looking for other forms of banking and lending?

  1. Use your savings: If you have money set aside in a savings account it could make better sense financially to use some of it to clear your overdraft, particularly if you’re paying high interest on your borrowing

  2. Transfer the balance: If your interest rate is high, you could use a money-transfer credit card to clear the debt built up in your overdraft. You may get a 0% interest period for 18 months in some instances

  3. Switch providers: If you switch to a new bank, you could be offered an interest-free period on your overdraft for a set amount of time. This could help you avoid interest building up while you’re paying off your overdraft balance

  4. Take out a loan: A low-rate personal loan could make paying off your overdraft more affordable, especially if the loan comes with a low-interest rate

You may be able to switch banks if you’re currently overdrawn, but your existing overdraft will need to be agreed with your proposed new bank or building society before the switch. If your new bank won’t offer you an overdraft up to the amount you are already overdrawn, you’ll have to repay what you owe before switching.

An overdraft should only be seen as a way of managing your finances in the short term. If this is the case and you need more money than you currently have in your current account, then it might be right for you. It’s easier and quicker to set up an overdraft than a loan or credit card and by definition you’ll only borrow the exact amount you need. However, always make sure it is authorised by your bank first and understand the interest charges you face, as they can be more expensive than other ways of borrowing.

To open a bank account, you’ll usually need the following information to hand:

  • Personal information: Usually your full name, nationality, contact details, date of birth and national insurance number

  • Proof of address: A recent utility bill, mortgage statement or tenancy agreement, bank statement or council tax bill 

  • Proof of identity: Such as your passport or driving licence. If you’re opening a children’s account or student account, your bank may accept a birth certificate as proof of identity 

Whether you can get an interest-free overdraft will depend on your bank or building society and their view of you as a customer. For example, students are often given interest-free overdrafts as an incentive to sign up as new customers when they are young.

Customers with a better credit score are more likely to be offered an interest-free overdraft too because they are seen as a lower risk of not repaying what they owe. It’s worth noting that because all interest-free overdrafts are given at the account provider’s discretion, they can also remove them at short notice. The bank should always give you warning and a chance to repay what you owe, but it’s another reason why overdrafts shouldn’t be seen as a way of long term borrowing.

It’s a good idea to check your account statements regularly, because this could stop you going into your overdraft without knowing. It can also be a good way to double check whether there are any transactions you don’t recognise.

Look for a provider with good customer service, because you never know when you’ll need to call them up or go into a branch to fix an issue.

Remember to be careful with your PIN and account details; you should keep this information safe and protected. Remember, your bank will never ask you to reveal details like your PIN, either on the phone, in person or through an email.

Your bank will almost certainly have an app that lets you manage your account online, and some may even be based on their app. This is excellent for quick and easy money management.

Each bank has different ways of transferring money. Some require you to use a card reader when transferring any sum of money, while others only use it for transactions over a set amount.

Other banks do not use card readers at all, so if money transfers are something you might be doing a lot of, it’s worth checking the policy details to see how easy it is to make payments on the go.

If your current account comes with benefits such as air miles, you might want to check whether you really need them. For example, if you’re not a frequent flyer, is an air miles bonus worth the extra cost?