What happens to your overdraft when you switch bank?

An overdraft is money you owe your old bank, and a switch closes that account. So the new bank has to agree to lend you enough to cover it, or you pay it off before the switch happens.

HSBC says "You may be able to switch bank accounts with an overdraft, but check with your new bank first. You may have to repay the overdraft before you can switch."

Asking for an overdraft means a credit and affordability check. If you’re planning several switches, our post on credit scores explains how they show on your file.

After a switch, payments sent to your old account are redirected for you. Danske Bank warns that "your old bank is entitled to use any funds it receives in settlement of the debt on your old account." So if you still owe the old bank, it can keep money passing through to pay off what you owe.

Student and graduate accounts often come with a 0% overdraft. Switch that account away and the overdraft goes with it, and the new bank is unlikely to match it. If you rely on it, keep that account and open a second ordinary account to switch instead. Our post on switch bonuses for students has more.

Bank Switcher plans every switch around a spare account, so an overdraft on your main account stays where it is.