- a withdrawal of money from a bank in excess of the amount credited to the drawer
- the amount withdrawn in excess
- a draft, or current of air, passed over a fire, as in a furnace, or passing down through a kiln
- An example of an overdraft is to write a check for $40 when you only have $20 in your account.
- An example of an overdraft is the air that passes over the fuel in a furnace.
- a. The act of overdrawing a bank account.b. Abbr. OD or o/d The amount overdrawn.c. The maximum amount of credit extended to a customer.
- also o·ver·draught a. A current of air made to pass over the ignited fuel in a furnace.b. A series of flues in a brick kiln designed to force air down from the top.c. The air so forced.
overdraft - Investment & Finance Definition
Credit issued by a bank if a check is written on an account that does not have sufficient money to cover it and the bank chooses to approve the check. Often banks link a customer’s savings account or credit card to the checking account to cover overdrafts, and an overdraft fee will be charged.
- Opting out does bring the risk of having a debit card transaction declined in the event of insufficient funds in a checking account; however, it also means the accountholder will not encounter the fees associated with overdraft.
- When you have business overdraft protection, then the money transfers automatically to your bank account to pay a check or to allow you or your employee to use your debit card, even if you have a $0 balance in the bank.
- Unfortunately, many people have reported problems with the First USA bank card that have prevented them from making timely payments, thus lowing their credit score, or resulting in overdraft fees that must be paid.
- You may even end up spending more than you have, which means you get the dreaded "Your card has been declined" spiel or if you happen to have savings, you see it decline every month due to overdraft charges.
- Some financial institutions made it standard to allow accountholders to withdraw money from ATMs despite an insufficient account balance, but then turned around and charged the overdraft fee for the service.