Overdraft – instant extension of credit from a lending institution, a person can be said “overdrawn” when an individual withdraws from a bank account exceeding to the amount of his or her savings account.

For example when a person have a savings account into a certain bank amounting to P5,000.00 and he or she withdrawn P6,000.00 to his or her saving account that is called over-drafting.

If you have an overdraft account, your bank will cover checks which would otherwise bounce. As with any loan, you pay interest on the outstanding balance of an overdraft loan.

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Related ChexSystems Banking Information:

1. Overdraft Protection
2. Negotiable Order of Withdrawal Account
3. Lien
4. Bounce Protection
5. Will New Overdraft Rules Increase the Number of People on the ChexSystems List?

Tagged as: overdraft, Overdraft Account, Overdraft Loan