overdraft

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Related to overdrafts: Cash credit

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 January 2017, the average unarranged overdraft fee, based on one penalty for a whole month, was PS53.
BARCLAYS: "Barclays does not provide unarranged overdrafts or any other form of unarranged borrowing.
It can be all too easy to regularly dip in and out of an overdraft without fully considering the overall cost - and whether borrowing could be cheaper elsewhere.
1,152 consumers for higher overdraft limits than would have otherwise been provided.
4 YOU CAN SHIFT OVERDRAFTS TO SPECIAL 32-MONTH 0% CREDIT CARDS AS WELL A FEW specialist money-transfer cards let you pay cash into your bank to pay off your overdraft, then you owe them instead.
3% of accounts incur three or fewer overdrafts a year, leaving a smaller targeted number of customers.
She urged CFPB to extend opt-in overdraft rules currently applying to ATM withdrawals and non-recurring point-of-sale transactions to include checks and ACH payments.
Now as this isn't a debt shifting card, you have to play clever and be disciplined to take advantage of it for reducing overdrafts.
This means doing more with less, so overdraft activity is reduced," concludes the study.
NATIONWIDE has upped the credit interest and lowered the overdraft costs on its FlexDirect current account.
If overdrafts could be covered by a different mechanism (such as a linked savings account, for example), make sure customers know they have alternatives.
Survey respondents were informed that banks can no longer charge a fee for covering overdrafts when they use a debit card unless the customer tells the bank in advance that they want overdraft protection and are willing to pay a fee for the service.