You can get help to access your money if your bank account is overdrawn. Show
Select your payment or service to find out how this impacts you: Education
Page last updated: 17 November 2022 You just need a few more dollars. There just isn’t quite enough in our account. Or there is none at all! Some banks will let you go into a negative balance on your transaction account and some won’t. Which banks will let you overdraw your bank account? A lot. Read more below. Quite simply, an overdraft is a withdrawal of money from your bank account that’s larger than the amount of money in the account. Sometimes
you’re overdrawn accidentally, but sometimes you have a pre-arranged amount that you can overdraw your account by. Overdraft facilities are available on personal transaction accounts and business accounts rather than on savings accounts. In many ways, an overdraft is an unsecured line of credit that you have access to if you need it. It’s similar to a credit card because the amount (or credit limit) is pre–arranged and has a limit. You may also pay a fee or interest on the amount that
you’re overdrawn by. Overdrafts are actually a popular alternative to credit cards because the interest rate or fees are generally lower than those associated with a credit card and you don’t usually have a set repayment schedule to maintain. An overdraft is also linked to your transaction account so you don’t need
another card, another PIN and another monthly statement to deal with. Having a pre–arranged overdraft ready for you can offer peace of mind because you won’t get returned direct debits (and the resultant fees) or failed payments while you’re shopping. Applying for an overdraftMost banks will let you apply for an overdraft online via their internet banking portal or their mobile / tablet app. If you already have a transaction account with the bank it’s a simple process. You could also apply for an overdraft with another institution if you find one with more suitable features. There are criteria you’ll have to meet, as with any credit agreement, but they’re not as strict as the requirements for a larger loan, credit card or mortgage. You’ll need to be at least 18 years of age, have some form of regular income and be an Australian citizen or resident. When you’re applying for an overdraft, you’ll need some form of ID, your tax file number and your bank account details, as well as details of your income and regular outgoings. Which bank accounts offer overdrafts?Most of the bigger banks, like Commonwealth Bank, Westpac, ANZ and NAB, as well as some of the smaller institutions offer overdrafts on some of their transaction accounts. Generally, the more basic accounts, or accounts for younger people, don’t have overdraft facilities. Do overdrafts have credit limits?Yes, overdrafts have limits, although these can range from a few hundred dollars to tens of thousands. Your personal limit will vary according to your income and other circumstances, as well as how much you feel you need. If your account has overdraft fees or an interest rate that you don’t feel comfortable with, then you can either settle for a smaller arrangement or look elsewhere. It’s also important to keep an eye on your bank and overdraft balance to make sure you don’t go over it or you may face extra fees and higher interest rates. The ANZ Access Advantage account, for example, charges $6 per day for overdrafts that are over the agreed limit up to a maximum of $60 per month. How can you use your overdraft facility?While your overdraft isn’t “free” money, you can use the facility as you would use your actual money. You can make EFTPOS payments, for example, as well as BPAY, online transactions and transfers. Are you wondering how to overdraw your bank account at an ATM? It’s simple, just withdraw money as usual and as long as you’re within your agreed limit, you’ll be able to take the money out. The advantages of having an overdraft on your bank accountNow you know how to overdraw your bank account you might be asking yourself what the advantages are. There are several benefits to having an overdraft, even if you rarely use it, including:
The disadvantages of having an overdraft on your bank accountThere are few disadvantages to having an overdraft facility, but here are some things to lookout for:
Compare transaction accounts at InfoChoice today. The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible. The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007. Can you overdraw NAB account?Your NAB Personal Overdraft is linked to your NAB Classic Banking account or NAB Retirement Account. It lets you withdraw extra money up to an approved amount. In other words, it lets you go in and out of negative balance with your transaction account.
How do I overdraw my bank account?Most banks will let you apply for an overdraft online via their internet banking portal or their mobile / tablet app. If you already have a transaction account with the bank it's a simple process. You could also apply for an overdraft with another institution if you find one with more suitable features.
What is my NAB overdraw limit?You can only borrow up to $50,000 in total limits across both a NAB QuickBiz Overdraft and NAB Business Credit Cards (applied for online). The QuickBiz Overdraft is only available as a new facility.
Can I overdraft with no money in my account?What is overdraft protection? Overdraft protection is a service provided by your bank that ensures your transactions are covered if you have insufficient funds in your checking account. The bank will automatically move funds you have available in another linked account to the overdrawn account.
|