over·draft | \ˈō-vər-ˌdraft \

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

In addition, these financial institutions have cheaper access to capital and already own the software—currently used for overdraft protection—to make such loans quickly and at low cost. Tim Chen, Fortune, "Banks Should Lead the Way Out of the Payday Lending Trap," 6 June 2018 Plenty of consumers, of course, can sign up for alerts to their cell phones already to avoid overdraft fees or be contacted about suspicious activity. Susan Tompor, Detroit Free Press, "Could a tsunami of robocalls be heading to our cell phones?," 5 July 2018 The Finn by Chase app, however, doesn't allow customers to overdraw, which helps them avoid costly overdraft fees. Adam Shell, USA TODAY, "Chase all-mobile bank, Finn, rolled out nationwide in search of Millennials," 28 June 2018 Prosecutors have painted Uresti as someone under substantial financial distress who was regularly incurring overdraft charges before and during the time he was involved with the now-defunct company. Patrick Danner, San Antonio Express-News, "Uresti was courting investors in FourWinds as his own bank accounts were overdrawn," 31 Jan. 2018 Miami tops the list, with an average overdraft charge of $35. Robert Channick, chicagotribune.com, "Customer sues MB Financial Bank for allegedly charging thousands in 'predatory' overdraft fees," 13 Mar. 2018 The report also shows that Asian, Latinx and African Americans pay substantially higher overdraft fees and expenses to maintain checking accounts than whites. Michael Harriot, The Root, "Your Bank Is a White Supremacist," 22 June 2018 But contamination because of groundwater overdraft, the researchers said, could happen almost anywhere in the Central Valley. Kurtis Alexander, San Francisco Chronicle, "Overpumping of Central Valley groundwater has side effect: too much arsenic," 5 June 2018 But that service results in the bank or credit union charging the customer an overdraft fee. Paul Gores, Milwaukee Journal Sentinel, "Lawsuit accuses Summit Credit Union of improper overdraft fees," 17 May 2018

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.

See More

First Known Use of overdraft

1812, in the meaning defined at sense 1

Keep scrolling for more

Learn More about overdraft

Statistics for overdraft

Look-up Popularity

Time Traveler for overdraft

The first known use of overdraft was in 1812

See more words from the same year

Keep scrolling for more

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



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 \

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

Keep scrolling for more

Comments on overdraft

What made you want to look up overdraft? Please tell us where you read or heard it (including the quote, if possible).


to reject or criticize sharply

Get Word of the Day daily email!

Test Your Vocabulary

Words from Greek and Roman Mythology Quiz

  • the-triumph-of-venus-by-alessandro-magnasco
  • Boreal comes from the name of the ancient Greek god of which wind?
True or False

Test your knowledge - and maybe learn something along the way.


Test Your Knowledge - and learn some interesting things along the way.


Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!