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 ?
Half of the consumers who overdraw their checking accounts do so by $40 or less, and 34 million consumers, or about 26% of consumer checking accounts, do this 10 or more times per year, Moebs said.
The firm determined that the least expensive place to overdraw a checking account is San Francisco, with a median price of $22.50.
Overdraws allow the archer to use a shorter (and therefore lighter) arrow to achieve higher arrow speed and a flatter trajectory However, overdraws -- especially longer overdraws -- are generally a bit more critical of any archer's shooting error.
Most bowhunters who use overdraw rests also shoot mechanical bowstring releases.
Several companies sell overdraw shelves that adjust from short to very long.
Not being able to overdraw isn't necessarily bad, though, as it stops you getting into more difficulties.
If a customer chooses not to participate in overdraft protection, any transaction that overdraws their account would be denied.
If you are one of them, consider moving your account to a provider that rewards customers who don't overdraw.
For the 12million customers who regularly overdraw without permission, things aren't so rosy.
DO speak to your bank and get approval if you want to overdraw. That way there may be an arrangement fee of one per cent of your agreed limit, a fee of pounds 5 a month and an interest rate of 18 per cent a year or less.