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I have found that drill bits are always slightly undersized. For example, 10mm bits tend to be more like 9.8mm diameter. And in aluminium, the hole ends up being about 9.9mm. The same seems to be the case for conical stepped drill bits

I've found it useful for inserting ball bearings, since they can be hammered in place without being damaged and will stay firmly in place. Also, bolts tend to be slightly undersized so will have a more snug (but still loose) fit.

What's the actual reason for drill bits being undersized?

Oddly, hole saws tend to be slightly oversized. A 15mm hole saw's teeth outer diameter measures to be 15.05mm and makes a 15.3mm hole.

Is there a term for drill bits which are slightly oversized instead? Or hole saws which produce slightly undersized holes? (assuming they exist)

Jayy
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They short answer is that they aren't. Exact sizes will, of course depend on manufacturing tolerances but 0.2mm is a lot undersized by normal standards, although for jobber drills this won't actually matter much.

For example metric tap drill sizes are generally specified to at least 0.1mm

One possible explanation for measuring drills as undersized is that the shank often gets worn, especially if it has slipped in a chuck and it is difficult to accurately measure the diameter across the flutes.

The actual size of the hole produced by a given drill is a different matter and will depend on the drilling setup and the material being drilled. Twin flute twist drills tend to produce slightly triangular or hexagonal holes, especially when the material being drilled is significantly thinner than the diameter of the drill, but this is more to do with flexing then the actual diameter of the drill bit. This tends to make them functionally undersized in terms of fitting bolts etc and for general fabrication it is normal practice to go 0.5-1.0mm above nominal size for a clearance hole for a metric bolt (notwithstanding any additional issues with fit and clearance between sets of holes etc).

With twin flute twist drills in general it tends to be the roundness, and in some cases straightness, of holes which is the limiting factor on accuracy. Better tolerances are usually achieved by using a reamer, a multi-flute drill/mill or by boring with a lathe, mill or specialist drilling machine. There are also specialist drills eg gun drills for use where the hole depth is very much larger than the hole diameter.

Chris Johns
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