What Is A Bank Overdraft?

What a overdraft is, is when you take more money out than you have in your account.  The bank goes ahead and spots you the extra money even if its just some change.  Then they charge you an overdraft fee.

It's a legal scam designed by the banks to steal money out of ones account. They also use the return deposit item scam to rip you off twice for the same transaction. A human never sees or touches the transaction but a mere 60 seconds to enter the deposit and its either paid or returned within milliseconds via a computer so they can't even justify the $35 nsf fee. You can't open a bank account though unless you sign the documents giving them the right to rip you off.

A bank overdraft is something that you can choose to have if your bank allows it, and basiclaly it lets you draw out more money than you have in. Usually the amount of money you can have as an overdraft in the beginning is around £500 but it depends upon the bank and how much they will let you borrow personally.

Bank overdrafts can come in extremely handy if you have bills coming out which you cannot currently afford to pay. Perhaps your payday from your job is at the end of the month yet some bills may want to come out in the middle of the month? You would not have the money and therefore you would become overdrawn and if you have not got a limit then you will be charged. In order to find out more about overdrafts visit your local bank and they will be able to explain more to you.

According to my knowledge...........................

If you are na account holder in a bank for a long time, and if the bank authorities think that you are a regular customer with a clean image, then at critical times when you are in need of money, though you dont have the needed amount in your account, the bank gives you the draft for the requested amount, so that it will be deducted in the course of time from your account.

For eg. if you have a balance of only $500, and you need $1000, then bank gives you draft for $1000 and the remaining $500 shall be deducted from your account, next time when you deposit the amount.

This facility is provided by a bank to the customer.and customer can get amounts and write cheques and make other payments even when the balance is not enough in their account to cover them.  But the bank will take some charges for this facility.

It is when there is a call for payment on an account that does not have sufficient fund to pay for the payment.