Overdraft

Overdraft

Noun / Verb · /ˈəʊ.vəˌdrɑːft/

Definition

(Noun) a facility that allows a bank account holder to spend more money than is in their account, up to an agreed limit; the amount by which a bank account is overdrawn — the excess of withdrawals over available funds; (Verb, rare) to overdraw an account.

Origin

From over- (beyond, in excess) + draft (a drawing of money from a bank, a bill of exchange — from Old Norse dráttr, a drawing, a pull, related to drag and draw). An overdraft being literally a drawing-over — drawing money beyond what is in the account. The banking sense being established from the nineteenth century as modern commercial banking developed and the facility of allowing trusted customers to draw beyond their current balance became a standard financial product. The overdraft being one of the most widely used personal finance products in the UK.