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Overdrafts

Short-term borrowing with monthly caps on charges, an annual waiver on fees and a limit you control.

An overdraft is a way to borrow money short-term with your current account. Overdrafts are not suitable for long-term or ongoing borrowing, so you may wish to look at other options if this is how you’ll be using one.

With an overdraft, you can continue spending or paying bills when your account balance goes below £0. The overdrawn amount will usually be subject to debit interest and you will be charged for entering into an unarranged overdraft.

You can check if you have an existing overdraft on your account and how much that is in online banking, the mobile app or on your statement.

Calculate overdraft costs

Representative example


Assumed credit limit

£1200


With debit interest at

18.9% EAR variable

What is an overdraft for?

Overdrafts are useful for covering unexpected costs or emergency spending. They can help you avoid fees for missing payments and make sure you aren’t cut off from services.

If you find that you’re regularly using your overdraft, there are other forms of credit that might work better for you.

What are the different types of overdraft?

There are two kinds of overdraft: arranged and unarranged.

Arranged overdrafts

An arranged overdraft is a set amount you can borrow, that you’ve agreed with us in advance. We charge interest on your overdraft, using an interest rate we agree on, before you start using it. The interest rate is variable, which means it can change over time. Should there be any changes to our interest rates we will communicate them to you in advance.

Tips for using your arranged overdraft

  • You must make regular payments into your account to reduce the amount you owe
  • When applying for an overdraft limit, you should think carefully about how you will be able to repay
  • You can request to change or remove your overdraft limit at any time
If you have a Current Account Plus, Privilege Premier Account or a Privilege Account and you want to reduce your overdraft, you can't reduce it below your automatic overdraft.

What happens if you haven’t arranged an overdraft

If you go over your arranged overdraft limit, you’ll enter an unarranged overdraft. You’ll also enter an unarranged overdraft if your account balance falls below £0, before you’ve set up an arranged overdraft.

Your payments may be refused if you go over your overdraft limit or try to go overdrawn without an arranged overdraft in place.

How you’ll be charged when you use an overdraft

When you use an overdraft, you will be charged:

  • interest on the amount you are overdrawn by
  • daily and monthly charges if you go into an unarranged overdraft

You can find more information about charges in our important documents here.

How unarranged overdraft charges work

  • You’ll pay a service charge of £10 per month for your unarranged overdraft
  • You’ll also pay a daily charge of £10 for each day your unarranged overdraft increases

How we limit overdraft charges

We know that it’s hard to keep track of what you’ve spent sometimes. You may accidentally go into your overdraft, or past your arranged limit. There are three ways we limit the charges for our overdraft customers:

£20 buffer

For the first £20 of an arranged or unarranged overdraft, we don’t charge any fees.

You’ll still have to pay interest on the amount you borrowed.

Six-day waiver

Surprise bills and sudden expenses happen. If they cause you to go over your £20 buffer or past your arranged overdraft limit, we’ll waive the fees - as long as you pay back the amount you borrowed within 6 business days.

This waiver is only available once per year. For example, if you use it on 29 September 2019, you won’t be able to use it again until 29 September 2020. You’ll still have to pay interest on the amount you borrowed.

£60 monthly charge cap

We’ll never charge you more than £60 per month for using an arranged or unarranged overdraft.

This cap covers interest and any fees you’ve built up over the month.

Text alerts when you go into your overdraft

To help you manage your money and limit any charges, we now send overdraft text alerts.

  • These alerts will notify you either before you go into, or when you’ve entered into an arranged or unarranged overdraft.
  • We’ll also send an alert if you don’t have enough money in your account to cover any payments coming out that day.

As long as we have your mobile number, you’ll be automatically opted in for overdraft text alerts. You can opt out of arranged and/or unarranged overdraft alerts at any time by contacting us. You can opt out of arranged and/or unarranged overdraft alerts at any time by contacting us.

How overdrafts affect your credit reference file

Any type of borrowing shows up on your credit file. However, an unarranged overdraft shows as arrears - this can negatively impact your credit file and may make it harder for you to obtain credit in the future.

What are the alternatives?

If you’ve been a Co-operative Bank customer for more than 1 month, you might be eligible for a Co-operative Bank Credit Card, with a fixed rate of interest for 3 years.

If you’re planning on making a big purchase and want to spread the cost over a few months, a loan might be more suitable.

Overdraft cost calculator

We’ve created a tool to help you understand what you’ll be charged when you use your overdraft.

Financial difficulties

If you’re experiencing financial difficulties and find that you are unable to keep up with bill payments, we recommend that you get in touch with us as early as possible.

We will be happy to discuss your needs and help you understand which options are available to you.

You can call us on:

+44(0)344 844 8899

Lines open

8am - 8pm, 7 days a week

Important information about our call charges

Alternatively, visit us in branch

Use our branch locator to find your nearest branch

To apply for an overdraft or increase your limit, you need to be:

  • Aged 18 years or over
  • A UK resident
  • Employed*, self-employed, retired or medically retired
  • Overdrafts are offered subject to status and are not available on Cashminder accounts.

*You can still apply if you have never worked or ceased work due to an illness or disability, or if you are a full time carer. If you're in receipt of one of the following, you can continue to apply:

  • Pension income
  • Rental income
  • Disability benefits (Disability Living Allowance, Incapacity Benefit, Personal Independence Payment)
  • Child maintenance
  • Working tax credits (Or Universal Credit equivalent)
  • Child tax credits (Or Universal Credit equivalent)
  • Carer's allowance
  • Statutory maternity / paternity / shared parental pay
  • Employer paid maternity or paternity allowance

Ready to apply?

You can request an arranged overdraft when you're applying for a current account.

If you already have a current account with us:

You can request an overdraft or change your existing overdraft limit by calling us on:

+44(0)3457 212 212

Lines open

8am - 8pm, 7 days a week

Important information about our call charges

Alternatively, visit us in branch

Use our branch locator to find your nearest branch

Important documents


Not the right borrowing option for you?

It's important to consider other borrowing options depending on how much you want to borrow and how long for. We have other borrowing options that might better meet your needs. Whether or not these borrowing options are available to you will depend on your circumstances.

A credit card

We have three different credit cards available to apply for online that may meet your borrowing needs.

More about credit cards

A loan

We have teamed up with Freedom Finance to help you find the right loan with one quick application.

More about loans

The Co-operative Bank reserves the right to decline any application.

Whether we can offer you credit depends on your circumstances and our lending policy. We may decline your application based on your circumstances or our lending policy. We may be able to offer a product that's different to the one advertised.

smile, The Co-operative Bank and Britannia are trading names of The Co-operative Bank plc, which is a member of the Financial Services Compensation Scheme (FSCS).

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