How do I get an Interest Free Overdraft?

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  • Written By: M.C. Huguelet
  • Edited By: Heather Bailey
  • Last Modified Date: 09 September 2019
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If you want to be able to debit money in excess of your available bank account balance without being financially penalized by your bank, you may want to consider an interest free overdraft. The exact definition of an interest free overdraft can vary depending on the country in which your account is based. In some countries, it refers to a line of credit which is offered to an account holder by his bank, while in other countries, it is a free protection service which transfers money from a designated source when an account becomes overdrawn. To get an interest free overdraft, you should speak to a representative at your bank to find out which types of overdraft services are available.

In some countries, such as Ireland and England, the term interest free overdraft refers to a line of credit which is offered to an account holder by his bank. Even if the account holder’s account has no funds in it, he can withdraw money up to the amount of his overdraft limit, and will not be assessed an interest charge on these overdrawn funds. It should be noted that while this type of overdraft is interest free, the account holder may be charged a set fee each time he overdraws his account. In addition, the time frame for repayment of overdrawn funds can vary from bank to bank.


If you live in a country such as the US, the term interest free overdraft can have a fairly different meaning. Instead of offering a line of credit from which account holders can draw funds, banks in the US and countries with similar banking systems offer the option of linking one account to another to prevent bounced checks and overdraft charges. If you initiate a transaction using an account that lacks sufficient funds to pay for that transaction, your bank transfers money from a linked account designated by you, thereby allowing the transaction to be approved, and preventing overdraft or returned check fees.

Banks in the US and elsewhere may also offer interest free overdraft coverage. Under this system, the bank pays for a transaction initiated using an account with insufficient funds, thus preventing the transaction from being denied. These funds, often along with a set coverage fee, are then recouped by the bank from future deposits made by the account holder. It should be noted that this type of overdraft coverage is usually subject to the bank’s discretion, and may not be offered in every case.

To get an interest free overdraft, you should speak to a bank representative to find out which types of overdrafts are available to you. If your bank offers credit-style overdrafts, the representative can advise you as to the maximum overdraft amount you are eligible for. Should your bank offer overdraft protection services, your representative can assist you in linking one or more of your accounts.


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