# Negative-Balance Offset Accounts > This article will help you determine whether a negative-balance offset account setup is right for you. If so, it also covers the steps you'll need to take. Source: https://support.ynab.com/en_us/negative-balance-offset-accounts-HkPKvOCc Last updated: 2026-09-21T17:33:29.616Z Determine how to know if you have a negative-balance offset account (a main spending account that stays permanently in the negative), and decide whether our account setup is suitable for your needs. If so, follow these steps. #### Redraw Facilities and Positive-Balance Offset Accounts If you have a **Redraw Facility** or **Positive-Balance Offset Account**, the process below won't work for your setup. Instead, check out the following article to [get your Redraw Facility or Positive-Balance Offset Account working in YNAB](https://support.ynab.com/en_us/positive-balance-offset-and-redraw-account-setup-rk11XHIlh). #### In This Article [Negative-Balance Offset Accounts Overview](#overview) [Need Support?](#support) [Who Is This Setup For?](#who) [Setting Up Your Negative-Balance Offset Account](#thesteps) [Using Your Negative-Balance Offset Account](#using) * * * ## Negative-Balance Offset Accounts Overview A negative-balance offset account is when your main spending account stays permanently in the negative. Depending on what country you live in, negative-balance offset accounts come in a variety of flavors. Canadians have “all-in-one” mortgages. In the UK it’s called an offset mortgage. Regardless of what you call it, it's worth saying again—a negative-balance offset account is when your main spending account stays **permanently in the negative**! As you can imagine, this gets tricky when your main spending account is always negative. Your YNAB plan is designed to work with the money you have on hand now. If you’re working with this type of account, remember that YNAB’s goal is to help you get back to positive and working with the cash you have on hand—because that’s when your financial immune system is strongest.  [Back to Top](#backtotop) * * * ## Need Support? If you are unsure whether or not this solution is for you or not, [tell the chatbot you need a human or send us an email](https://support.ynab.com/en_us/how-to-get-help-SygqcvtC5)! We are always happy to advise on the best way to set up accounts for users. 😀  If you do reach out, here’s the information we need:  * What account types do you have with your bank and what is the balance on each account? (Be sure to put a minus sign before the figure if the account balance is negative.) * What is the credit limit on the debt account? * Which account is your primary spending account? * Into which account is your paycheck deposited? If you already have an established plan in use, and you’re adding in this account setup for the first time, you may want to consider creating a [Fresh Start](https://support.ynab.com/en_us/plan-resets-and-fresh-starts-HkXYR_c0q), or even a brand new plan to test out the setup. That will eliminate any confusion with already existing accounts! [Back to Top](#backtotop) * * * ## Who Is This Setup For?  **Who should use this account setup in their plan?** * You have an account that you spend out of that lives permanently in a negative balance AND you do not have access to a regular cash account. * You have an “All-in-One” or Manulife mortgage set up. * You have a negative-balance offset mortgage type with your bank AND you do not have access to a regular cash account. **Who should NOT use this account setup?** * You have access to a regular cash account (checking or savings) that is separate from your [line of credit](https://support.ynab.com/en_us/line-of-credit-accounts-a-guide-S10LHsqkl) or mortgage account. * You are not living permanently in a state of overdraft, or the overdraft amount that you owe is less than the amount of your next paycheck (check out our article on [how to get out of overdraft](https://support.ynab.com/en_us/getting-out-of-overdraft-in-ynab-a-guide-B1blkysC9)). [Back to Top](#backtotop) * * * ## Setting Up Your Negative-Balance Offset Account We recommend completing the following steps in the **web app**. To set up this negative-balance offset account type in YNAB, you’ll need three things in your plan: 1. A **Spending Account**: an account with the account type Checking, for the account you spend from. 2. A **Credit Limit Account**: an account with the account type Checking, with a positive balance equal to what you can borrow. This is a fake account with fake money in it. 3. A **Payoff category with a target**, so you can set aside some of that fake money, and eventually pay off the debt completely. ![A spending and credit limit account are shown, along with a payoff category](https://cdn.bfldr.com/NIEXAZS5/at/krm84q4vm93jxv4358wv6s/Offset-Account-Web-Help-Article.png?auto=webp&format=png) Here's how we'll build those three things in YNAB! * [Step One: How to Add Your Spending Account](#Step-One) * [Step Two: How to Add Your Dummy "Account" Called Credit Limit](#Step-Two) * [Step Three: How to Add a Target](#Step-Three) ### Step One: How to Add Your Spending Account You’ll add an account that represents your current debt balance. This is the account you will spend from and record all transactions in. 1. Click _Add Account_ in the left sidebar. 2. Click _Add an Unlinked Account_. 3. Select account type _Checking_. 4. Set the balance of the account as the current balance of your offset account. This will be negative. You might be asking: "What if I've already got an account like this? Can I just use that one?" You sure can! As long as the balance is correctly showing as negative, and matches the balance at your bank, you can continue to use this existing account. ### Step Two: How to Add Your Dummy "Account" Called Credit Limit This is not a real “account” with your bank, but simply a way of expressing your borrowing limit in a way that offsets your debt balance. 1. Click _Add Account_ in the left sidebar. 2. Click _Add an Unlinked Account_. 3. Select account type _Checking_. 4. Name the account "Credit Limit." 5. Set the balance of this account as the limit you are able to borrow, as a positive number. For example, if your borrowing limit is $50,000, enter that as a positive amount in the account set-up process. ### Step Three: How to Set a Target Now check out the Ready to Assign amount: it has all the money you’re able to borrow, in green. Your next step is to tuck some of it away in a category and make a plan to get out of that debt. 1. Create a category in the Debt Payments Category Group called “Offset Payoff” (or whatever you’d like to name it). 2. Select that category and click _Create Target_ in the Inspector (or right sidebar). 3. Choose _Custom_. 4. For the amount, enter the credit limit of the offset account (the same number as the balance of the offset Credit Limit account, from the [Step Two section](#Step-Two) above). 5. Choose "Have a balance of..." as the behavior of your target. 6. Toggle the _Due by date_ option on. Enter the month and year that your loan matures (when your bank will require you to have paid off your loan), or the date you’d like to be out of overdraft. 7. Click _Save Target_. The amount now displayed in that target is the minimum you should set aside each month to pay down your negative-balance offset account to zero. Assign at least that amount now! If you don't, you'll be living on debt, not the assets you are depositing in the account.  ![Select the "Have a balance of..." behavior and enter in the credit limit as the amount needed](https://cdn.bfldr.com/NIEXAZS5/at/7sw8j9pnb4tz7b4wx3tp7ms/Offset-Target-Web-Help-Article.png?auto=webp&format=png) [Back to Top](#backtotop) * * * ## Using Your Negative-Balance Offset Account Now you can use your plan as normal. Manually enter or use [File-Based Import](https://support.ynab.com/en_us/file-based-import-a-guide-Bkj4Sszyo) (or both!) to enter spending and income transactions into the spending account. When you get a paycheck, you'll add it to your spending account as a positive transaction, categorized as Inflow: Ready to Assign. The amount will show up in Ready to Assign. Why? Because the positive credit limit account you've set up in step two is offsetting the negative balance of your spending account that was set up in step one. Now you can make a plan for your spending! The Payoff category will continue to accumulate cash every month—even though it might seem like you’re holding a large pool of “available” money here, this category is actually the amount you’ve paid into the debt on your account. If you move money out of the Payoff category, you’ll be effectively borrowing more from the credit limit. Banks love these types of accounts because they don’t expect people to make any headway on paying off the debt over time—but because you’re a YNABer, you’ve got a superpower here in your plan to help you beat the bank — unless you need to, **don't touch the money in this category!** Once the Available balance of the "Payoff" category equals the balance of the credit limit account, you’re out of debt and can dismantle this system. 🎉 #### Request a YNAB Feature Would you prefer a dedicated account type for negative-balance offset accounts? Fill out the [Feedback and Feature Request Form](https://ynab.typeform.com/to/Pt6cek)—our designers would love to hear your ideas! [Back to Top](#backtotop) * * * ## Help Us Help You! Our Knowledge Base team reviews article feedback responses weekly, and we actively revise these articles to make them as helpful as possible. That's where you come in! Our articles are scored based on the _Yes_ or _No_ ratings received below. We also collect freeform feedback for any _No_ ratings (so our team can focus in on what you were specifically searching for!). **Success**: Found what you were searching for? It would be super helpful if you click _Yes_ below. **Suggestions**: Didn't find what you're searching for and you'd like to share what terms or topics you wanted? Click _No_ below. 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