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 ?
All customers will have a pounds 10 buffer which means should they go overdrawn by pounds 9.
The account pays you pounds 5 a month if you pay in pounds 1,000 a month, so if you're overdrawn on only three days, you'd still be pounds 2 a month in credit after deducting the pounds 3 in charges.
One in 20 over 50s goes overdrawn without authorisation at least four times a year.
Some banks allow you to become up to pounds 500 overdrawn for a small fee.
Our table on the right shows how much it will cost you to go pounds 500 overdrawn for five days a month, and for 30 days a month.
Now the banks, due to their greed, are overdrawn and short of money, hard-working customers are having to bail them out free of charge via the Treasury.
By the time of his wife's death in July 1998 it was pounds 56,000 overdrawn with a pounds 60,000 limit.
Since all transactions are always authorized online against account balances and there are no paper checks in the float that can cause an account to be overdrawn, these new cards are safer for the issuer to issue to just about anyone, even those that are considered "un-bankable", as long as they have valid personal identification and a verifiable address.
Single mum Sarah Smith, from Wigan, has lost all her savings and is now heavily overdrawn to NatWest after losing pounds 4,500 following a similar phishing email.
I had a letter from Barclays stating I would be charged pounds 25 for each day I was overdrawn (by pounds 18) to a maximum of three days each month.
Four out of 10 people said they would be embarrassed telling someone their current account was overdrawn, while 28% of people said they would never tell their parents and 10% would not tell their partner.