Best bank accounts for overdrafts

Cut interest rates to 0%

Borrowing money using your overdraft can be the most expensive option, with most banks charging around 40% in interest. However there are a few accounts which offer lower rates – potentially 0%.

So if you ever go below zero on your bank balance, these are the current accounts to consider.

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Best 0% overdrafts

The best way to lower the cost of your debt is to get it down to 0%. Sadly few accounts offer sizeable interest free overdrafts.

If you can’t get this account you could consider a money transfer credit card, which will move the agreed credit limit to your bank account.

Nationwide FlexDirect overdraft: 0% for one year

This account has the largest 0% overdraft, with how much you get determined by a credit check. However you can check what you’re likely to get with an eligibility calculator as part of the application process.

If the amount isn’t enough, or you’re rejected, and you don’t want to proceed there won’t be a hard search on your credit report.

However you can only get the account benefits in your first 12 months. So if you’ve had the account in the past you won’t get this rate, though you will on a new joint account if you’ve not had one of those before.

Overdraft rate0% EAR overdraft for the first 12 months on up to £1,500
39.9% EAR above set rate and after 12 months
FeeNone
Multiple accounts?Two – one personal and one joint
NotesYou can only have the account once

Best 0% buffer overdrafts

For those that won’t go overdrawn by much, perhaps it’s just towards the end of the month or you want to cover mistakes if you’re moving money around, then there are a handful of accounts that will offer an interest free buffer

First Direct 1st account overdraft: £250 at 0%

The £250 0% buffer is a useful feature for anyone who occasionally goes overdrawn by a small amount.

The account also regularly runs switching deals, so moving your banking over could make you money to help clear some of your overdraft.

Overdraft interest rate0% EAR on first £250 (subject to status)
39.9% EAR if you borrow more than £250
FeeNone
RequirementsNone
NotesShared FSCS protection with HSBC

TSB Spend & Save Plus account overdraft: £100 at 0%

I’m not a huge fan of the TSB Spend & Save Plus account as though you can earn a £5 reward each month by using your debit card 20 times, much of that is wiped out by a £3 monthly fee.

However, the £100 buffer might be handy if you ocassionally go into the red.

The account also sometimes runs switching deals, which could help you clear some of your overdraft.

Overdraft interest rate0% EAR on first £100
39.9% EAR if you borrow more than £100
Fee£3 a month
RequirementsVarious to trigger £5 monthly reward

Barclays Premier account overdraft: £500 at 0%

This account is a hard one to get – you need a massive salary to be eligible. However if that’s you and you tend to go slighly overdrawn from time to time, this interest free buffer could be handy.

Overdraft interest rate0% EAR on first £500
35% EAR if you borrow more than £500
FeeNone
RequirementsSalary of £75,000 a year or £100,000 invested with Barclays

Best low rate overdrafts

If you can’t get an interest free overdraft or find an alternative way to lower you debts, then it’s possible to get less than 40% interest with some banks. However, they’re still expensive and there’s no guarantee you’ll get their lower rates.

Starling Bank overdraft: 15%, 25% or 35%

The cheapest non 0% overdraft is potetially with Starling Bank. When you apply they may offer you either 15%, 25% or 35%. All are lower that what you’d get elsewhere, but still not a reason to go overdrawn if you can avoid it.

Overdraft interest rate15%, 25% or 35% EAR up to £5,000
FeeNone
RequirementsNone
NotesDigital only bank

Monzo overdraft: 19%, 29% or 39%

Not as good as Starling’s offering, and there’s a chance you’ll get the super high 39%, but worth looking at if you really need to.

Again you can check what you’ll get when you apply. A hard search is only made on your credit file if you choose to go for the overdraft.

Overdraft interest rate19%, 29% or 39% EAR up to £20,000
FeeNone
RequirementsNone
NotesDigital only bank

Other bank overdraft rates

To give you an idea of what you could be getting charged, here are the core overdraft interest rates by the leading high street banks. There’s a chance rates could vary by different current accounts offered by each bank.

Bank of Scotland39.9%
Barclays35%
Co-operative Bank35.9%
Halifax39.9%
HSBC39.9%
Lloyds39.9%
Nationwide39.9%
Natwest39.49%
RBS39.49%
Santander39.94%
Triodos (£3 monthly fee)18%
TSB39.9%
Virgin Money19.9%, 29.9% or 39.9%

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As of 15/2/24

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