overdrawn fees

Save money with bank accounts that don’t charge overdrawn fees

Overdrawn fees explained: Find out which accounts won’t charge you for spending past your available bank account balance.

When you spend more money than you have in your bank account, you’ve overdrawn your account. Reforms to the banking sector changed the way banks charge customers for overdrawing transaction accounts.

Although overdraw fees still exist, now more than ever, there’s a choice of bank accounts to compare which don’t charge a fee for overdrawing your account. You can compare no overdraw fee bank accounts on this page.

What are overdrawn fees and how do I avoid them?

Overdrawn fees are a charge applied by your bank when you spend more money than you have in your transaction account. Not all banks charge overdrawn fees, so not all banks will let you overdraw your account. If your bank does let you overdraw your account, it will only be by a small amount ($10 for example), this amount varies depending on financial institution.

While choosing a bank account which doesn’t charge overdrawn fees gives you confidence that you’ll never pay extra for spending money you don’t have, it presents a problem if you have direct debit agreements with service providers and monthly charges are more than the money in your account. The direct debit is dishonoured and you may incur additional fees.

Overdrawn fees charged by the Big 4 Banks

From Australia’s Big 4 banking institutions: ANZ, NAB, Commonwealth Bank and Westpac; only NAB do not charge a fee if you overdraw your transaction account. These two banks may decline a transaction which takes you past your available balance.

Commonwealth Bank and Westpac may allow you to spend more money than you have in your account; however, you’ll incur an overdrawn fee for doing so.

BankOverdrawn fee
ANZ$6 daily (each day overdrawn by more than $50)
CommBank$10 daily

Avoid overdrawn fees with a NAB classic banking account

Rates last updated October 22nd, 2019
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
NAB Classic Banking
Enjoy convenient, unlimited access to your money.
$0 monthly account fee.
Tap and pay with your NAB Visa Debit card or your phone using Apple Pay, Google Pay, Samsung Pay or NAB Pay for Android. Temporarily block your card at the touch of a button if you lose it.

Compare up to 4 providers

What are the types of fees charged to bank accounts?

While not all institutions charge these fees, common fees among different everyday bank accounts include:

Account keeping fee

This is a fee for owning the account which is usually charged every month. Some banks offer account keeping fee waivers if you meet conditions such as deposit $2,000 or more every month. Most banks can also waive this fee if you’re a student or pensioner.

Overdrawn fee

A charge if you make a transaction that overdraws your bank account.

Australian ATM withdrawal fees

Most bank accounts attract a fee if you’re using an ATM not related to your bank. For example, St.George cardholders can make free ATM withdrawals at Westpac ATMs but incur a charge using Commonwealth Bank ATMs and vice versa.

International ATM withdrawal fee

A flat fee for using an ATM in another country. Some banks waive this fee, for example, Citibank don’t charge an international ATM withdrawal fee and Westpac waive this fee when you use any ATM which is part of the Global ATM Alliance.

Currency conversion fee

The majority of accounts available will charge a fee of about 3% if you make an EFTPOS purchase outside Australia. This includes overseas online purchases. The Citibank Plus Transaction Account and the Macquarie Bank Platinum Transaction account don't charge for currency conversion.

Statement fee

You may incur a charge if you request an additional paper print out of your account statement.

Cheque dishonour fee

A fee charged by your banking institution when you write a cheque and it bounces due to insufficient funds in your account.

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Are bank accounts with no overdrawn fees actually a good idea?

The good

  • No fees. You’ll never pay extra for spending money you don’t have.
  • Add an overdraft. Most financial institutions will let you attach an overdraft facility to your bank account. If you overdraw your account, your line of credit will be used. Interest applies to the portion of the overdraft you use. You’re under no obligation to use the overdraft line of credit.

And the bad

  • Rejected transactions. If you have direct debit agreements with service providers and one month your need to pay more money than you in your account (like $20 or $30), the transaction will be rejected. You may then incur a fee from the third party or your bank for having missed a payment.
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What are some things to avoid about bank accounts with no overdrawn fees?

If your bank account doesn’t charge overdrawn fees, they will not let you spend more than you have in your account. As mentioned above, make sure you always have enough money in your account to honour your direct debit agreements. If you don’t the direct debit payment may be rejected and you may incur fees from the debtor and your bank.

Help, I have some more questions!

Want to avoid fees all together? Compare fee-free bank accounts here.

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4 Responses

  1. Default Gravatar
    AlnoorNovember 25, 2017

    I have a account with citibank
    How much is the maximum i can overdraw from my everyday account
    Can direct debit be overdrawn by any chance
    And lastly what are the fees involved
    Thank u

    • Default Gravatar
      ArnoldNovember 26, 2017

      Hi Alnoor,

      Thanks for your inquiry

      If a redirected withdrawal results in your Transaction Account being overdrawn, debit interest charges may apply. For more information on fees, please refer to the Schedule of Fees and Charges.

      There was no specific information regarding the maximum amount you can overdraw from your account. It would be best to speak with Citibank directly to clarify this.

      Hope this information helps


  2. Default Gravatar
    AimeeMay 28, 2016

    I am on a centrelink benefit. Is it legal to be continuously charged overdrawn fees?

    • Avatarfinder Customer Care
      ShirleyMay 30, 2016Staff

      Hi Aimee,

      Thanks for your question.

      Unfortunately financial institutions have a right to charge overdrawn fees in line with their terms and conditions. If you’ve consistently overdrawn on your account, then this fee could be charged.

      To avoid this fee, you may want to consider a bank account that doesn’t charge overdrawn fees.

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