# Business overdrafts in NZ: rates, fees and how they work

> A business overdraft lets you draw on your bank account up to an agreed limit and only pay interest on what you use. Compare ANZ, ASB, BNZ, Kiwibank and Westpac overdraft rates and fees, checked on 6 November 2026.

By Jason Dark, last checked 2026-11-06. Part of [Loans](https://smallbusinessloan.co.nz/loans) on Skipper.

## The short version

- A business overdraft lets your account go below zero, up to an agreed limit, and you don't make fixed repayments.
- You pay interest only on what you use, but most banks also charge a monthly fee of 0.10% to 0.15% of your limit.
- Bank overdraft base rates were 10.85% to 11.47% a year on 6 November 2026, and you pay a margin on top.
- Going overdrawn without an arranged limit costs 18% to 22.5% a year, so set up a limit before you need one.

## What is a business overdraft?

A business overdraft lets your account go below zero, up to a limit you agree with the bank. You can use it when cash is tight and pay it back when money comes in, without fixed repayments. You pay interest only on the amount you use, calculated daily. The limit stays in place even when you're not using it, but most banks charge a monthly fee for having it.

An overdraft is good for covering short gaps in your cash flow, such as a slow month, a seasonal dip or waiting for a big invoice to be paid. An overdraft isn't the best choice for buying equipment or funding a long project, since rates are higher than a [business loan](https://smallbusinessloan.co.nz/loans/business-loans) and the bank can review your limit.

## Business overdraft rates and fees by bank

Every bank charges a base rate plus a margin it sets for your business, so your rate will be higher than the base rate. These are the published rates and fees, checked on 6 November 2026.

| Bank | Base rate | Monthly fee | Set-up fee | Unarranged or excess rate |
| --- | --- | --- | --- | --- |
| [ANZ](https://smallbusinessloan.co.nz/lenders/anz) | 11.27% a year (Working Capital Base Rate) | 0.12% of the limit, at least $5 | 1% of the limit, at least $75 | Base rate plus 7% a year |
| [ASB](https://smallbusinessloan.co.nz/lenders/asb) | 11.47% a year (business base rate) | 0.12% of the limit or highest overdrawn balance | Up to 1%, at least $25 | 22.50% a year unarranged |
| [BNZ](https://smallbusinessloan.co.nz/lenders/bnz) | 11.20% a year | 0.15% of the limit, at least $5 | Set out in your agreement | Base rate plus 10% a year |
| [Kiwibank](https://smallbusinessloan.co.nz/lenders/kiwibank) | 10.85% a year | 0.10% of the limit, at least $5 | At least $75 | 22.00% a year |
| [Westpac](https://smallbusinessloan.co.nz/lenders/westpac) | Set for each business | A line of credit charge | May apply | 19.95% a year unarranged, plus $4 a month |

The Reserve Bank's average rate on new small business overdrafts was 10.14% in October 2026, up from 9.87% a year earlier. That average includes the margin, so it shows what businesses actually paid.

## What an overdraft really costs

You pay the monthly fee on your entire limit, even if you don't use it. For example, at ANZ, a $20,000 limit costs $24 a month or $288 a year, even if you never go overdrawn. You also pay interest on any amount you use.

So an overdraft is cheap if you dip into it now and then, and expensive if you stay overdrawn. If you're always using most of your limit, a term loan at a lower rate will usually cost less. The [business loan interest rates guide](https://smallbusinessloan.co.nz/loans/business-loan-interest-rates) compares overdraft and loan rates.

## Arranged and unarranged overdrafts

If your account goes below zero without an agreed limit, the bank charges a higher unarranged rate. For example, it's 22.50% a year at ASB, 22.00% at Kiwibank and 19.95% at Westpac, plus a $4 monthly fee at Westpac. At ANZ and BNZ, it's the base rate plus 7% or 10%. Setting up a limit before you need it costs less.

## Who can get a business overdraft

The overdraft is linked to a business transaction account at the same bank. Kiwibank requires a Business Edge account, and BNZ's QuickBiz overdraft needs a Business First Transact account. Westpac asks for your NZBN and business financials. Limits start at $500 at ASB and Westpac.

Some banks let you apply online. With BNZ's QuickBiz, you can apply for $5,000 to $100,000 without extra security. Kiwibank's Fast Capital can give company directors who use Xero or MYOB a decision in minutes. ANZ's goBiz uses your Xero or MYOB figures in the application, and ANZ says it can help new businesses with set-up costs. For larger limits, banks may ask for security over business assets or property.

## Other ways to cover a cash flow gap

If customers pay you on terms, [invoice finance](https://smallbusinessloan.co.nz/loans/invoice-finance) gives you money against unpaid invoices and grows with your sales. BNZ's CashFlow Plus works like this. A business credit card is another option for small, regular expenses. If your bank won't give you an overdraft, an online lender might lend you money for a short period, but it will cost more. The [eligibility checker](https://smallbusinessloan.co.nz/tools/lender-match) shows how many lenders could consider your business.

## Common questions

### What is the interest rate on a business overdraft in NZ?

Banks charge a base rate plus a margin set for your business. On 6 November 2026, base rates were 10.85% at Kiwibank, 11.20% at BNZ, 11.27% at ANZ and 11.47% at ASB. Westpac doesn't publish one. The Reserve Bank's average rate on new small business overdrafts was 10.14% in October 2026.

### Do I need security for a business overdraft?

Not always. BNZ's QuickBiz offers overdrafts of $5,000 to $100,000 without extra security. For bigger limits, banks might ask for security over business assets or property.

### Is an overdraft cheaper than a business loan?

For short gaps, it usually is, because you only pay interest on what you use. But overdraft base rates are higher than term loan base rates, and you pay a monthly fee on the whole limit. If you'll stay overdrawn for months, a term loan usually costs less.

### What happens if I go over my overdraft limit?

Most banks charge a higher rate on the amount over your limit. At ANZ, that rate is its Working Capital Base Rate plus 7% a year. At BNZ, it is its overdraft base rate plus 10%. Westpac charges your normal overdraft rate on the amount over your limit.

## Sources

- [ANZ: Business overdrafts](https://www.anz.co.nz/business/lending/overdrafts/)
- [ASB: Business overdrafts](https://www.asb.co.nz/business-loans/overdrafts.html)
- [ASB: Business and rural loan interest rates and fees](https://www.asb.co.nz/business-loans/interest-rates-fees.html)
- [BNZ: Business overdrafts](https://www.bnz.co.nz/business-banking/loans-and-finance/overdrafts)
- [BNZ: Business transaction accounts and fees](https://www.bnz.co.nz/business-banking/everyday-accounts/business-transaction-accounts)
- [Kiwibank: Business overdraft](https://www.kiwibank.co.nz/business-banking/borrowing/business-overdraft/)
- [Westpac: Business overdraft](https://www.westpac.co.nz/business/loans-and-finance/business-overdraft/)
- [Reserve Bank of New Zealand: Retail interest rates on lending and deposits (B3)](https://www.rbnz.govt.nz/statistics/series/exchange-and-interest-rates/retail-interest-rates-on-lending-and-deposits)