Seguros y pensiones para todos

Home > Glossary > Overdraft


In financial terms, an overdraft is money on credit that banks grant to account holders by allowing them to pay bills or withdraw money without a sufficient balance in their account.

For example, when you get a bill and you do not have enough money to pay for it, some bank accounts allow you to pay the bill by generating an overdraft or negative balance in your account. In other words, by letting your account become negative.

Bank overdrafts normally imply paying a commission or some kind of interest to the bank.