What is an overdraft?

Tip

Deposits to your account may not be immediately available for your use. Always make sure you have sufficient available funds in your account. Even if you just made a deposit, you may still overdraw your account.

You can overdraw your account through checks, ATM transactions, debit card purchases, automatic bill payments, and electronic or in-person withdrawals.

Many banks and credit unions offer overdraft protection programs in which the bank or credit union generally pays the transaction and charges you a fee (in addition to requiring repayment of the overdraft amount). Overdrafts can also be covered through a transfer of funds from a linked account, credit card, or line of credit.

Banks and credit unions have different fees associated with overdraft protection so, when shopping for a checking account, be sure to ask what the account terms are with respect to the cost of overdraft protection, a linked account or a line of credit.

Where this page came from

This page was imported from Consumer Financial Protection Bureau. Published by the Consumer Financial Protection Bureau and, as a work of the United States government, in the public domain.

Nobody has written it yet — it is the source material at a new address, which is why search engines are asked to skip it and why no one earns from it. It is up for grabs: take it on, and it is yours to rewrite and to earn from.