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 ?
The possible direction of new regulations for overdraft protection was indicated in a letter last fall from Rep.
Customers do not get charged by more than they go over their authorised overdraft limit by, so for example if they only dip into an unauthorised overdraft by PS15, this is the maximum that they will be charged for doing so, even if the customer remains over this limit for more than three days.
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.
The blow comes as the average authorised overdraft rate on offer is at a new high, according to financial information website Moneyfacts.
Banks should be required to give consumers information on the comparative costs for other alternatives for covering overdrafts, such as a line of credit or transfer from a credit card.
NATIONWIDE has upped the credit interest and lowered the overdraft costs on its FlexDirect current account.
Nearly 70,000 turned to the Consumer Credit Counselling Service for help with overdraft debt in the first half of the year, showing just how many fall into the trap.
Two per cent of all SMEs were unsuccessful with an overdraft application, and one per cent were unsuccessful with a loan application.
The newly created Bureau of Consumer Financial Protection, as the agency in charge of writing new rules in this area, has already signaled a few areas that will be ripe for regulation, and one in particular is overdraft programs.
Most banks offer different types of overdraft protection services and programs.
He was speaking after a survey revealed that the average interest charged on unauthorised overdrafts was as much as 167 per cent.
Please be aware that this notice does not constitute either a written agreement of an obligation or a prearranged agreement for Iowa State Bank & Trust to pay your overdrafts [Right.