Is an overdraft right for you?

Overdrafts are a form of short-term debt. Your bank account goes into overdraft when the balance drops below $0. You can apply for an arranged overdraft limit, which will have cheaper fees and lower interest than an unarranged overdraft.

Borrowing money with an overdraft

If you think your account may dip below $0, let’s talk. Before we can set up an ANZ Overdraft limit, we must make sure you can afford repayments – this is part of our responsible lending obligations. 

If our assessment shows you can’t afford an overdraft, we may be able to work with you to find another solution.

You’re responsible for paying back your overdraft. For joint overdrafts on accounts with two or more people, all account holders are responsible for repaying the money. If one person can’t or won’t repay it, the other(s) will be responsible for repayments. This is called ‘jointly and severally liable'. 

When an overdraft can be a good choice

As a planned back-up

Overdrafts are a good option if you want money available for emergencies. It's reassuring to have access to extra funds when you need them (for example, an unexpected car bill), as long as you have a plan to repay it.

If you’re a student or aged under 21

An overdraft linked to an ANZ Jumpstart account lets you borrow up to $2,000 interest-free if you’re aged 18 to 20 or studying full-time and a New Zealand citizen or permanent resident. And there are no monthly overdraft management fees. 

When you turn 21, or finish studying full-time, you’ll no longer be eligible for the Jumpstart benefits. So be sure to pay off your overdraft before then to avoid interest and fees.

When an overdraft may not be right for you 

You use it for impulse buys

Think about your spending habits. Having an overdraft at your fingertips can be tempting. If you’re the impulsive type, it may not be the right option for you. 

Using an overdraft to buy things you haven’t budgeted for means your balance can quickly become tricky to pay off. You’ll also be charged interest, which could make even bargain buys more expensive than you thought. 

If you’re juggling debts like store cards, buy-now-pay-later or credit cards, it may help to bring all your debts into one loan. Consider a debt consolidation personal loan

You don’t regularly return to a positive balance

Think about how you manage debt. Overdrafts need care and attention, just like your family pet or favourite houseplant. Can you make regular repayments, and get your account back to $0?

Paying off your balance reduces the amount you owe and reduces the amount of interest to pay.

If you want to borrow money to pay for a specific thing, e.g. a car, travel or home renovations, consider a personal loan.

Important information

Interest rates are subject to change. Eligibility, lending criteria, terms and fees apply to all ANZ Overdrafts. See Rates, fees and agreements.

This is for information purposes only. Please talk to us if you need financial advice about a product or service. See our financial advice provider statement (PDF 39.8KB) for more information.