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Bank overdrafts

This advice applies to Scotland

You might be able to take more money out of your bank account than what’s in there. This is called ‘going into your overdraft’ or ‘going overdrawn’.

You’ll be charged interest on the amount you overdraw.

It's important to let the bank know in advance if you need to go into your overdraft. This is called an ‘agreed’ or ‘authorised’ overdraft.

An agreed overdraft may be for a fixed amount over a set period, for example £500 to be repaid within six months. Or you may be given a limit on an ongoing basis to use whenever you like.

If you take out more money than you’ve agreed

If you go overdrawn without agreeing this with the bank first, it's called an 'unauthorised' overdraft. This might affect your credit rating and make it harder for you to get a loan in future.

The bank will usually return (bounce) any cheques you write and other payments such as direct debits from your account.

If you have an agreed overdraft and you take out more than the limit, the bank might also reduce or stop your overdraft.

Contact the bank and ask how they can help you. They have to help you if you’re struggling to pay for things without an overdraft. For example, they might cancel fees they’ve charged you or help you work out how to pay back the overdraft.

If the bank doesn’t help you, you can complain to the Financial Ombudsman Service on the ombudsman’s website.

If the bank charges you to return a payment

The bank can only charge reasonable fees. This means they can’t charge much more than it cost them to return the payment.

If you think the bank has charged too much, you can complain and ask them to explain how they worked out the fee.

If you don’t agree with how they worked out the fee, you can complain to the Financial Ombudsman Service on the ombudsman’s website.

Staying in your account limit

Keep a record of everything you pay out of your bank account, including cash withdrawals, direct debits and standing orders. Keep a careful check on the amount in your account (the balance) and try to remember to check your bank statements as soon as you get them.

If you think you might take out more than your account limit, get in touch with the bank straightaway to make an agreement.

Further help and information

The Money Advice Service

The Money Advice Service website has lots of useful information about borrowing and managing your money.


Financial Ombudsman Service (FOS)

Lending Standards Board

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