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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
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.