Overdraft checking account

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Overdraft checking account

A checking account associated with a line of credit that allows a person to write checks for more that the actual balance in the account, with a finance charge on the overdraft.

Overdraft Checking Account

A checking account with a negative net cash balance. That is, the owner of an overdraft checking account owes money to the bank rather than the bank holding his/her money. Overdraft checking accounts occur when a customer spends more money from the account than he/she deposited into it. This may occur when he/she has written too many checks or used a debit card to buy things with too much value. Most banks charge a fee on overdraft accounts; the amount of the fee varies from bank to bank, but is often between $15 and $30 in the United States. Some banks charge a smaller amount for the first transaction where an overdraft takes place and a larger amount every transaction thereafter to discourage irresponsible spending.
References in periodicals archive ?
Overdrawn checking account? Suspicious mole on your left calf?
Hardekopf warned that this card is also an ACH card and could trigger ACH NSF fees for purchases made on overdrawn checking accounts.
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.