Definition

Noun: 1. A financial deficit in a bank account: An "overdraft" occurs when money is withdrawn from a bank account, resulting in a negative balance. It represents a short-term credit arrangement where the bank allows the account holder to spend more money than is currently deposited. 2. The amount of such a deficit: The specific sum of money by which an account is overdrawn.

Usage and Examples

• Noun:
  • The bank charged a fee for the overdraft. (This describes the deficit event or the credit facility itself.)
  • My account has an overdraft of $50. (This specifies the amount of the deficit.)
  • She arranged an overdraft facility with her bank for emergencies. (This refers to the pre-approved credit limit allowing temporary negative balances.)

Advanced Usage

• "Overdraft protection": A service offered by a bank to automatically cover transactions that would cause an overdraft, often by transferring funds from a linked account or extending a line of credit, typically for a fee.

  • I signed up for overdraft protection to avoid declined transactions.

• "To go into overdraft" / "To be in overdraft": Phrases describing the state of having a negative account balance.

  • If you spend too much, your account will go into overdraft.
  • His current account has been in overdraft for a month.

Variants and Related Words

• Overdraw (verb): To withdraw more money from an account than is available, thereby creating an overdraft.

  • Be careful not to overdraw your account.

• Overdrawn (adjective): Describing an account with a negative balance.

  • My account is overdrawn.

Synonyms

• Deficit: A deficiency or shortage, especially of money.
• Negative balance: The state of an account where withdrawals exceed deposits.
• Shortfall: A lack or deficiency in an amount.

Related Phrases and Terms

• Unauthorized overdraft: An overdraft that occurs without a pre-arranged agreement with the bank, usually incurring higher fees.

  • The fees for an unauthorized overdraft are very high.

• Arranged overdraft: A pre-agreed limit with the bank up to which a customer can overdraw their account.

  • My arranged overdraft limit is $1,000.

Noun

1. a draft in excess of the credit balance