over·​draft | \ ˈō-vər-ˌdraft How to pronounce overdraft (audio) \

Definition of overdraft

1 : an act of overdrawing at a bank : the state of being overdrawn also : the sum overdrawn

Examples of overdraft in a Sentence

Recent Examples on the Web Sometimes, people are fearful of seeing their checking account balance drop to zero and then trigger hefty overdraft fees. Susan Tompor, Detroit Free Press, "How banks are motivating customers to save up for big purchases," 12 Feb. 2020 USAA Federal Savings Bank has reached a confidential settlement with a California woman who sued the San Antonio institution over its overdraft charges. Patrick Danner, ExpressNews.com, "San Antonio-based USAA Bank settles overdraft fees lawsuit," 2 Dec. 2019 That could mean raising overdraft charges and ATM fees and adding or increasing monthly maintenance fees for checking accounts, McBride says. Paul Davidson, USA TODAY, "Trump wants Fed to cut interest rates to zero or below. Here's what it could mean for you.," 12 Sep. 2019 Then the gum incurred a second overdraft fee for an additional $30 fee. Robin Kaiser-schatzlein, The New Republic, "Everyone Wants to Be a Bank," 6 Jan. 2020 One worker in Tennessee had an account overdraft by nearly $1 million. Aaron Randle, New York Times, "$26 Million in Missing Paychecks, One Mysterious Swindler Charged," 21 Nov. 2019 So Martin Gilbert, who then oversaw $112 billion at Aberdeen Asset Management Plc, set aside $1 billion of cash and set up a $500 million overdraft. Washington Post, "Bonfire of Woodford’s Vanities May Burn More Funds," 11 June 2019 The average overdraft fee has risen from $21.57 in 1998 to $33.36 this year, according to the site. Renae Merle, Washington Post, "Lawmaker seeks details about problems with Wells Fargo checking accounts," 21 Nov. 2019 The average overdraft fee is $33.36, just below the record $33.38 set 2017. Paul Davidson, USA TODAY, "ATM fees reach a record average of $4.72 per withdrawal, with more coming," 2 Oct. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'overdraft.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of overdraft

1812, in the meaning defined at sense 1

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The first known use of overdraft was in 1812

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Last Updated

19 Feb 2020

Cite this Entry

“Overdraft.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/overdraft. Accessed 20 Feb. 2020.

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More Definitions for overdraft



Financial Definition of overdraft

What It Is

An overdraft, also called non-sufficient funds (NSF), occurs when a bank customer writes a check that is presented on an account that doesn’t exist or that has insufficient funds to cover the amount of the check.

How It Works

Let’s assume John Doe has $1,000 in his checking account today. He goes to the mall and writes a check for $1,250 at a furniture store. Because there are insufficient funds to cover the amount of the check, John is going to overdraft his account.

When the furniture retailer attempts to deposit the check, the furniture retailer’s bank (Bank ABC) will present the check to John Doe’s bank for payment. John Doe’s bank will then either pay the check (which might occur if John Doe has overdraft protection at his bank) or "bounce" the check by returning it to Bank ABC without payment. Often, banks stamp the check itself with a large "NSF" stamp (which stands for “nonsufficient funds”). Typically, Bank ABC will charge the furniture retailer a fee for presenting a bad check, and John Doe’s bank will charge John for the overdraft. The furniture store will also likely charge John Doe a fee for the overdraft.

Why It Matters

In most states, writing a bad check is at least a misdemeanor, with the consequences growing depending on the state, the amount involved and whether the transaction crosses state lines. Most overdrafts are simply oversights by consumers, so even if the police are not involved, the fees for bouncing checks can run in the hundreds or even thousands of dollars if the check writer is particularly disorganized. For this reason, it’s important to have an overdraft line or a second account from which a bank may draw when the funds in the check writer’s primary account are insufficient.

Source: Investing Answers


How to pronounce overdraft (audio)

English Language Learners Definition of overdraft

: an amount of money that is spent by someone using a bank account that is more than the amount available in the account : an amount that is overdrawn from an account


over·​draft | \ ˈō-vər-ˌdraft How to pronounce overdraft (audio) \

Legal Definition of overdraft

1 : the act or result of drawing on a bank account for more than the balance also : the amount exceeding the balance in an overdraft
2 : a loan or credit extended on a current account especially to established or institutional customers

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Rhyming Dictionary: Words that rhyme with overdraft

Spanish Central: Translation of overdraft

Nglish: Translation of overdraft for Spanish Speakers

Britannica English: Translation of overdraft for Arabic Speakers

Britannica.com: Encyclopedia article about overdraft

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