An overdraft is a facility on your current account intended for short term borrowing. When your balance goes below £0, you enter an overdraft. The overdrawn amount will usually be subject to debit interest.

To use our overdraft services you must be aged 18 or over. Overdrafts are offered subject to status.

An overdraft is a way to borrow money short-term with your current account and can be useful for covering unexpected costs or emergency spending. They can help you avoid or minimise fees for missing payments or make sure you aren’t cut off from services.

Overdrafts are not suitable for long-term borrowing. If you're using your overdraft in this way or becoming reliant on it, you may wish to look at other types of borrowing that might better meet your needs.

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.

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 up to, that you’ve agreed with us in advance. We charge interest on your overdraft. The interest will be agreed with you before you start using the overdraft.

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 by contacting us.

If you have a Smilemore Account and you want to reduce your overdraft, you can't reduce it below your automatic overdraft.

Unarranged overdrafts

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.

Charges and credit file impacts

When you use an arranged and/or unarranged overdraft, you will be charged debit interest at an annual interest rate of 35.9% on the amount you are overdrawn by, unless you have an account with an interest free overdraft. Find more information about overdraft charges.

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.

How we help 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 two ways we help limit the charges for our overdraft customers:

£60 monthly cap

We have a £60 cap on interest for any type of overdraft (arranged or unarranged) in one charging period. This means the maximum you will ever pay for using an overdraft per charging period is £60.

The monthly cap refers to the charges applied in a charging period not a calendar month. Please refer to the Account Charges Leaflet (PDF) for details of the charging periods.

The monthly cap on unarranged overdraft charges for your account is £60.

Below is a standard definition to allow you to compare unarranged overdraft charges across different providers, but in practice we don't actually charge fees for allowing or refusing a payment where you have a lack of funds.

  • Each current account will set a monthly maximum charge for:
    1. going overdrawn when you have not arranged an overdraft; or
    2. going over/past your arranged overdraft limit (if you have one).
  • This cap covers any:
    1. interest and fees for going over/past your arranged overdraft limit;
    2. fees for each payment your bank allows despite lack of funds; and
    3. fees for each payment your bank refuses due to lack of funds.

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.

Find out more about overdraft text alerts

How to manage your overdraft limit

You can request to change or remove your overdraft at any time by calling 03457 212 212 (call charges). You must make regular payments into your account to reduce the amount you owe.

If you have a Smilemore account, you won't be able to reduce your overdraft lower than the interest free £260 overdraft facility.

Tracking incurred charges

We keep a record of debit interest charged for an arranged and/or unarranged overdraft. We categorise the charges by what’s called a ‘charging period’. A charging period usually starts on the 5th of the first month and finishes on the 4th of the following month.

This information is then added to a statement that we send you at the end of the charging period. The charges are taken from your account on the date shown on your statement.

What will my overdraft cost?

You will be charged debit interest at an annual interest rate of 35.9% for entering into an arranged and/or unarranged overdraft. When you enter an unarranged overdraft, this can have a negative effect on your credit file.

If you have a Smilemore account you will only start to be charged debit interest once you go over your £260 interest free overdraft.

smile Current Account representative example

£500 credit limit

35.9% annual interest rate

35.9% representative APR variable

Duration for 1 year

Total amount payable is £679.50 which includes the £500 overdraft and £179.50 interest.

How does our overdraft compare?

The representative APR provided can enable you to compare the costs across different products and providers.

How much does my overdraft cost in pounds and pence?

As an example, the interest cost of borrowing £500:

7 days


30 days


60 days


This is based on borrowing £500 on the first day of our charging period and assumes this overdrawn balance remains until it is repaid at the end of 7, 30 or 60 days. This example does not include any interest-free amounts that are provided on some accounts.

You can calculate the cost of an overdraft based on how you might use it with our overdraft cost calculator.

Financial difficulties

If you’re experiencing financial difficulties and find that you are unable to keep up with bill payments, or you are in, or about to enter into, an unarranged overdraft on your account, please 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.

View our financial support page

You can call us on:

03457 212 212

Lines open 8am - 6pm, Monday to Friday and 9am to 5pm on Saturdays and Sundays.

Calling from outside of the UK

00 44 3457 212 212

(call charges)

Alternatively, visit us in branch:

Branch locator

Before you apply

You can also check if you are likely to get accepted for an overdraft using our eligibility checker.

Apply for or change an overdraft

Check you're eligible

You must be:

  • Aged 18 years or over
  • A UK resident
  • Employed, self-employed or medically retired*.

*You can still apply if you get one or more of the following:

  • Pension income
  • Rental income
  • Disability benefit (Disability Living Allowance, Incapacity Benefit, Personal Independence Payment or Universal Credit equivalent)
  • Child maintenance
  • Child tax credits (or Universal Credit equivalent)
  • Working tax credits (or Universal Credit equivalent)
  • Carer's allowance
  • Statutory maternity, paternity or shared parental pay
  • Employer-paid maternity or paternity allowance
  • Universal credits- only alongside salary, wage or disability benefits.

You must not:

  • Have had any County Court Judgements or defaulted on any credit agreements in the last 2 years
  • Currently be 2 or more payments in arrears on any credit agreement
  • Have had any Individual Voluntary Agreements, trust Deeds or been declared bankrupt in the last 6 years.

Overdrafts are offered subject to status.

We recommend completing this form using a desktop device.

If you don't have a current account with us you'll need to open one before you can apply for an overdraft. You can request an arranged overdraft as part of your current account application.

When you'll hear from us

We aim to respond with the outcome of your application within 7 business days, although this may occasionally take a little longer.

We'll let you know we've received your request and provide any updates by email.

If you need a quicker response, we’re here to help. Please call us on 03457 212 212 – lines are open Monday to Friday, 8am to 6pm, and Saturday and Sunday, 9am to 5pm (call charges).

Further Information

You can get further information by calling 03457 212 212 (call charges). Our branches will be happy to discuss our full range of borrowing services including overdrafts.

Find a branch

Important documents

Read the Important Documents below, and save copies of them for future reference.

Account charges (PDF)

How our overdrafts work (PDF)

Our lending commitments and what we ask of you (PDF)

Overdraft pre-contractual agreement (PDF)

Find out more about Financial Services Compensation Scheme | This will open in a new tab

Protecting your money

Your eligible deposits with The Co-operative Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. This limit is applied to the total of any deposits you have with the following: The Co-operative Bank, Britannia and smile. Any total deposits you hold above the limit between these brands are unlikely to be covered.

Please read further information on the FSCS scheme here or visit their website