overdraft

(noun)

The act of overdrawing a bank account.

Examples of overdraft in the following topics:

  • Commercial Banks

    • Commercial banks engage in the following activities: the processing of payments; accepting money on term deposit; lending money by overdraft, installment loan, or other means; providing documentary and standby letters of credit guarantees, performance bonds, securities underwriting commitments and other forms of off- balance sheet exposures; and the safekeeping of documents and other items in safe deposit boxes.
    • An overdraft is an example of an unsecured loan.
    • An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.
    • If there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate.

  • Short-Term Loans

    • Overdraft protection is a financial service offered by banking institutions in the United States.
    • An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.
    • In this situation, the account is said to be "overdrawn. " If there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate.

  • Credit Operations

    • A line of credit may take several forms, such as overdraft protection, demand loan, special purpose, export packing credit, term loan, discounting, purchase of commercial bills, traditional revolving credit card account, etc.

  • Electronic Banking