Finder makes money from featured partners, but editorial opinions are our own.

Money Hack: How to avoid overdrawing your account


overdrawn account

The product to consider if your account is always in the red.

Overdrawing your account is easy to do. It might be a day before you get paid when you go a few dollars over, or you might have your funds stashed in a savings account when your balance slips below zero.

While it's easy to do, it doesn't make those overdrawn account fees any easier to deal with. Not to mention the negative effect it can have on any future applications you make for credit (lenders that ask for your bank statements are unlikely to approve you if you are regularly overdrawing your account).

The hack

Check how often you're overdrawing your account and how much you're paying, then compare it to your bank's personal overdraft product. An overdraft is a small line of credit attached to your transaction account. Any time your balance reaches $0, you'll be able to draw up to and including that limit and then repay it at a variable rate.

The main catch with overdrafts are the costs, as you will generally be charged a monthly fee to use the overdraft as a cost for the convenience and the interest rates are usually the same as credit card rates, which can be between 14-17% p.a. However, some banks, such as CommBank, will only charge you fees and interest when you use the overdraft.

If you are regularly overdrawing, paying a monthly fee may still work out to be the cheaper option. Here is a breakdown of the personal overdrafts from the Big Four:

BankMinimum limitEstablishment feeOngoing feesInterest rate
CommBank$100$0$10 monthly fee (charged when balance is over $10)14.9% p.a.
NAB$500$0$35 minimum line fee charged every 6 months based on your limit12.77% p.a.
Westpac$250$0$6 monthly fee12.9% p.a.
ANZ$500$0$5 monthly fee16.85% p.a.

How a personal overdraft works

finder money hacks is a bi-weekly roundup of the latest tips and tricks to improve your finances. Check back every Wednesday and Saturday for new hacks.
Picture: Shutterstock

Get more from Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site