overdraft

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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 ?
It was clear from the amounts of money that were going into the practice from the health service and the amounts of money that were going out of the practice on legitimate expenditure, the practice should not have been overdrawn," said Ms Lewis.
Overdrawn DLAs have recently come under scrutiny from HMRC, and in particular the practice known as 'bed and breakfasting,' where loans are repaid prior to the nine month deadline to avoid the tax charge, only to be redrawn shortly afterwards.
Sharon Ariana Reilly added: "I've been overdrawn a few times - the amount of money they charged me for this was bad.
Customers who do not opt in for overdraft protection may have one-time debit card transactions or ATM withdrawals declined if their account is overdrawn.
But the figures are an improvement on when the same research was carried out 12 months ago, when 17% of people said they were permanently overdrawn.
Originally, Blaine said, the idea was to call certain good customers if their accounts were overdrawn and have them come in and make a deposit so that it could be handled without embarrassment.
Earlier this month Royal Bank of Scotland, which also offers current accounts under its NatWest brand, announced it was slashing fees for returning bounced cheques and standing orders from Au38 to Au5, while fees for paying for goods while overdrawn have been halved from Au30 to Au15.
They with drew the pounds 200, making Miss Payne overdrawn, and took away her bank card until the money could be repaid.
She added that employees would be refunded any charges if their accounts were overdrawn or if they breached their overdraft limit as a result of the problem.
About 71 per cent of people aged between 18 and 29 have an overdraft facility, with the average person going overdrawn by pounds 656, while 21 per cent go more than pounds 1,000 into the red, according to price comparison website uSwitch.
That said, the authority of Gibbon is often overdrawn.
In a move aimed at helping consumers fend off high fees for overdrawn checking accounts, the Federal Reserve and other financial institution regulators announced publication of a new brochure, Protecting Yourself from Overdraft and Bounced-Check Fees.