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Overdrafts explained

An Arranged or Unarranged Overdraft is a way to borrow money from the bank and is intended for occasional use.

Here’s a quick overview of how they work:

Arranged Overdraft – This is a borrowing limit on your account that we agree with you in advance, so it’s there when you need it. You’ll pay Arranged Overdraft interest on the amount you choose to use.

Unarranged Overdraft – This is where you borrow from us when there is no money left in your account (or when you have gone past your Arranged Overdraft limit) and this has not been agreed with us in advance. You will pay Unarranged Overdraft interest.

If you don’t have enough money in your account to cover a payment, we may charge a Refusing A Payment Due To Lack Of Funds Fee.

You should aim to repay your overdraft borrowing as quickly as possible and use it responsibly as your usage will be reflected in your credit file.

Calculate the cost of an overdraft

Use our simple overdraft calculator to compare the cost of overdrafts and work out how much an overdraft could cost you.

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An Unarranged Overdraft is when you go over the amount available in your account and you haven't arranged an overdraft with us – or you go over your Arranged Overdraft limit

Overdraft debit interest rates

We calculate interest on your account balance each day, and debit it every month in arrears.

Overdraft ratesPer month (%)Per annum (%)EAR (%)1
Arranged Overdraft1.52%18.29%19.90%
Unarranged Overdraft1.52%18.29%19.90%

Representative Example

How does our overdraft compare?

Rate of interest
18.29% per annum (variable)

Total amount of credit

19.90% variable

The APR in this example can be used to compare the cost of the overdraft with other providers or with other types of borrowing

Overdraft fees

Refusing A Payment Due To Lack Of Funds Fee You'll be charged this fee when we refuse a payment due to lack of funds in your account (or Arranged Overdraft). But you'll not be charged this fee if the value of the refused payment is £4.00 or less. This is the Refusing A Payment Due To Lack Of Funds Fee Buffer Amount.£4.00£4.00
Monthly Maximum Charge The Monthly Maximum Charge (MMC) is a monthly cap on Unarranged Overdraft interest and Refusing A Payment Due To Lack Of Funds Fees. The MMC is the most you'd pay each month in such interest and fees combined.

1. Each current account will set a monthly maximum charge for:
(a) going overdrawn when you don't have an Arranged Overdraft; or
(b) going over/past your Arranged Overdraft limit (if you have one).

2. This cap covers any:
(a) interest for going over/past your Arranged Overdraft limit; and
(b) fees for each time we Refuse A Payment Due To Lack Of Funds.
£100.00 per calendar month

The amount of the Refusing A Payment Due To Lack Of Funds Fee and debit interest will be notified to you at the end of each calendar month, giving you at least 14 days notice before it is applied to your account.

Check if you're eligible

Use our overdraft eligibility tool to check if you’re likely to be accepted for an Arranged Overdraft. This won’t leave any visible footprint on your credit history or affect your credit score.

Check eligibility

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[1] EAR (Effective Annual Rate) - The Effective Annual Rate is used to express the cost of borrowing on current accounts. The EAR takes account of the rate of interest charged, the frequency it is levied to accounts and compounding of interest. It does not include overdraft fees and is variable.