overdraft


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Related to overdraft: Overdraft Facility

Overdraft

Provision of instant credit by a lending institution.

Overdraft

A situation in which a bank customer withdraws more from his/her account than he/she had previously deposited. For example, if an account holder has $1,000 in the account and withdraws $1,200, this is an overdraft of $200. The bank may or may not honor the overdraft, depending on its policies and the importance of the customer. Usually, however, an overdraft incurs a relatively steep penalty fee.

overdraft

A draft for more than the balance in the account on which the draft is drawn. A bank may honor an overdraft, depending on the importance of the customer and on prior arrangements (if any) to cover overdrafts. See also NSF check.

Overdraft.

An overdraft is a withdrawal from a bank account that exceeds the funds you have available.

If you overdraw your account and you have overdraft protection, the bank will transfer money up to the limit on your line of credit to your account to cover the withdrawal. Although you will pay interest on the amount the bank transfers to your account from your line of credit, it is likely to be less than the substantial fees you pay for each overdraft.

overdraft

a financial facility for advancing MONEY to an individual or business (the borrower) by a COMMERCIAL BANK, SAVINGS BANK etc. (the lender). An overdraft is a form of CREDIT which allows the borrower to withdraw as much money as required up to a prearranged total limit, whereupon interest is charged at a rate related to the base rate of interest on outstanding balances (see INTEREST RATE). In the case of businesses, overdraft facilities are often provided on an indefinite basis, thus providing the borrower with a continuous line of credit used mainly to finance WORKING CAPITAL requirements. See BANK LOAN.

overdraft

see BANK LOAN.
References in periodicals archive ?
In regard to the overdraft agreement, Wolters Kluwer Financial Services Senior Attorney Kurt Stertz stated, "The standard generally is that the disclosure has to be substantially similar to the model form.
To avoid being hit with unauthorised overdraft charges, customers should be encouraged to arrange an authorised overdraft limit with their bank, even if they don't think they're going to use it.
This builds up the debt on the card, but allows your overdraft to be repaid by your income.
The CFPB found that overdraft policies vary greatly at financial institutions, which can be confusing for consumers.
Whoever you are with, if you do need to use your overdraft, remember to always agree it with the bank first, as charges and fees on unauthorised borrowing are even more eye-watering.
Your overdraft protection program isn't the only game in town; make sure customers understand that.
The research comes after figures from the Bank of England showed that overdraft rates soared to a record high during August.
Most banks offer different types of overdraft protection services and programs.
In a statement, the Halifax said customers said they "want a clear overdraft charging structure" and the Au1 a day represents "a simple set of daily fees".
The bank is basically saying that it has a new benefit for you, called the "Discretionary OverDraft Privilege Pollicy.
SOME ARKANSAS BANKERS are preparing for a dip in overdraft fee revenue as a result of the Federal Reserve Board's new rule that prohibits financial institutions from charging overdraft fees on some transactions without the customer's authorization.
Federal Reserve Board rules that take effect July 1 will require banks to get customers' permission before enrolling them in overdraft services for ATM and debit card transactions.