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Overdraft: meaning, definitions and examples

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overdraft

 

[ ˈoʊvərdræft ]

Noun
Context #1 | Noun

banking term

An overdraft occurs when a bank account balance goes below zero, resulting in a negative balance. It allows individuals or businesses to withdraw more money than they have in their account. This can lead to fees charged by the bank, and interest rates can apply to the overdrawn amount. Overdrafts can be arranged with the bank in advance or occur accidentally, creating a financial obligation to repay the borrowed amount. It's essential to manage overdrafts wisely to avoid significant debt.

Synonyms

deficit, negative balance, overdraw

Examples of usage

  • I had to pay a fee due to my overdraft last month.
  • She arranged an overdraft with her bank to cover unexpected expenses.
  • His account went into overdraft after he wrote a check without sufficient funds.
  • Overdraft protection can help avoid bounced checks.
  • If you consistently exceed your overdraft limit, the bank may charge you additional fees.

Translations

Translations of the word "overdraft" in other languages:

🇵🇹 descobrimento

🇮🇳 ओवरड्राफ्ट

🇩🇪 Überziehung

🇮🇩 overdraft

🇺🇦 овердрафт

🇵🇱 overdraft

🇯🇵 オーバードラフト

🇫🇷 découvert

🇪🇸 descubierto

🇹🇷 aşım

🇰🇷 오버드래프트

🇸🇦 السحب على المكشوف

🇨🇿 překročení

🇸🇰 prečerpanie

🇨🇳 透支

🇸🇮 prekoračitev

🇮🇸 yfirdráttur

🇰🇿 артықшылық

🇬🇪 ზედმეტი

🇦🇿 ödənişdən artıq

🇲🇽 sobregiro

Etymology

The term 'overdraft' originated from the banking industry in the early 19th century, combining the prefix 'over-' meaning beyond or above, with 'draft', a term used for withdrawing funds. It reflects the act of drawing out more money than what is available in an account. The concept itself dates back to the time when banks began to offer checks and allowed customers a certain amount of credit against their deposits. The use of overdrafts became common as personal banking evolved, leading banks to implement specific policies regarding fees and interest rates to manage the risk associated with this financial service. Overdrafts are regulated in many countries, and their policies can vary significantly from one financial institution to another.

Word Frequency Rank

Positioned at #21,607, this word is part of extensive vocabulary. It's relatively rare in general usage but may be important in specific fields or formal writing.