In this brief guide, we will discuss the Halifax overdraft charges.

Dipping into our overdraft is something almost everybody in the UK has done at some point or the other. Overdrafts are a very good short term borrowing option. They ensure we can take care of unexpected bills at a relatively good cost.

Overdrafts are primarily a form of short term borrowing and should therefore not be sued as a replacement for long term borrowing as they could end up costing way more than intended.

If you want to apply for a Halifax overdraft you can do this and you will get an instant decision. You can apply for a Halifax overdraft here.

You can apply online for an increase or decrease your current overdraft. The applications won’t affect your credit score

Halifax overdraft charges

Halifax provides overdrafts with all of its current accounts but to be offered a Halifax overdraft you will have to meet the eligibility requirements which involve credit checks. These are usually done at the point when you opened the account or if you apply for a Halifax overdraft later down the road.

Naturally, the Halifax overdraft charges will be key to you as you seek to understand what your Halifax overdraft is costing you. Unlike most banks, the Halifax overdraft charges are quite simple and straightforward to understand.

What are the Halifax overdraft charges?

The Halifax overdraft charges are as follows: You will only have to pay a daily arranged overdraft fee if you borrow over the arranger fee-free overdraft limit. Some accounts won’t have a fee-free overdraft limit so please check to see if your Halifax account has one so you can plan your borrowing accordingly.

The daily Halifax arranged overdraft fee is 1p for every full £6 you borrow up to £1,250.

It is then another 1p for every further full £7 you borrow between £1,250 and £2,500, and then, finally a further 1p for every full £8 you borrow over £2,500. 

This means the minimum amount you will need to be overdrawn by before you incur any Halifax overdraft charges is £6. If you go overdrawn by less than £6 you won’t have to pay any Halifax overdraft charges.

A very well welcomed policy of Halifax is to avoid charging further fees to customers who are currently incurring Halifax overdraft charges as they are currently in overdraft. This means you won’t incur any other fees as long as you are in overdraft. Fees such as missed payment fees, over-limit fees etc

In most cases, once you have hit(reached) your agreed Halifax overdraft limit you may not be able to make any more payments. You still will not be charged any miss payment fees by Halifax but the recipient of the funds may charge you a fee for missed payments.

Halifax also goes a step further to inform you when you are getting close to your overdraft or when you are near your agreed Halifax overdraft limit. You will usually receive a mobile alert via text to inform you of this if Halifax has your current mobile number registered in its system.

Different Halifax accounts have varying fee-free amounts before you will begin to incur Halifax overdraft charges.

For example “an account overdrawn by £500 over the fee-free amount (or with no fee-free amount) would pay a fee of 83p per day. Calculated at 500 divided by 6 = 83, equal to 83p per day.”

The Ultimate Reward Current Account includes a £300 fee-free limit, allowing you to take your account into an overdraft of £300 without incurring any Halifax overdraft charges.

A representative example of what the Halifax overdraft charges on the Ultimate Reward Current Account would be if you use an arranged overdraft of £3,000 is £4.50. This is because after taking into account the fee-free limit of £300 the Halifax overdraft charges will be incurred on £2,700.  The daily Halifax overdraft charge on the fee-free limit would be £0.

On using your overdraft on your Halifax Ultimate reward current account it states “If you have an Ultimate Reward Current Account and use your overdraft you will pay the £17 monthly maintaining the account fee. If you stay in credit, pay at least £750 into your account each month and make two direct debits, you will receive a discount of £2, reducing your monthly maintaining the account fee to £15.”

The Halifax Student Current Account comes with a fee-free overdraft limit of up to £1,500.

How to ensure you pay little Halifax overdraft charges?

To ensure you pay as little as possible in regards to your Halifax overdraft charges you may do the below:

The best way to avoid any Halifax overdraft charges or to keep them as low as possible its to repay any overdraft as soon as possible.

If you go into your overdraft during the day, bringing your account out of overdraft before the day ends will ensure you are not charged any Halifax overdraft charges. You can transfer money between your Halifax accounts or any other bank account as long as you have done it with faster payments. Any other form of payment will take much longer, e.g cheques.

You should also regularly monitor your account using online banking and your mobile app so you always know how much you have left in your bank account.

Check your monthly bank statements regularly to see if your spending is increasing and if you may need your overdraft based on your projected spending.

Ensure your mobile number is up to date on your Halifax current account so you will get the mobile text alerts informing you when you are nearing a zero balance and getting close to your overdraft. Your phone number will also be used to let you know when you are being charged daily arranged overdraft fees.

Switch your direct debits to after payday or when you will have the most amount of money to avoid going into your overdraft because of lack of funds. Ensure you know when your monthly payments are due so they don’t come at you as a surprise.

If you have any bills which are due you must only take into consideration your available balance which you can withdraw when viewing your account balance

You should be conscious of any cheques you have written as they can be cashed up to 6 months after you have written them

What happens if you go over your overdraft Halifax?

If you go over your arranged Halifax overdraft you won’t be changed any other fees but t=rather the same fees which will have been levied to you with your arranged overdraft. In any case, it is very unlikely you will be able to go over your Halifax overdraft.

How do I cancel my Halifax overdraft?

If you want to cancel your Halifax overdraft. Then follow the steps outlined below:

Sign in to your Halifax Online Banking, select the ‘More actions’ button on your current account, then choose the ‘Manage overdraft’ button (found in the ‘Overdraft’ dropdown menu). Click ‘Cancel Arranged Overdraft’ and follow the on-screen instructions. You can also do this through your Mobile Banking app.

How to apply for a Halifax overdraft?

To apply for a Halifax overdraft please follow the below steps:

On this page, Click the ‘Apply now’ button to sign into Halifax online Banking, then select ‘Overdrafts’ from the left hand of the screen ‘Our products and services’ panel, or alternatively from your bank account, select ‘More actions’ and then ‘Overdraft’.

Can I get an overdraft with Halifax?

Yes, you may be able to get a Halifax overdraft but this is all dependent on your ability to meet the affordability checks which Halifax will carry out. The checks will depend on your income, expenses and credit score.

In this brief guide, we discussed the Halifax overdraft charges. If you have any comments or questions please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.


John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.