The overdraft
Example: Overdraft allows account holder to withdraw more than available balance
Definition
"The overdraft" in finance refers to a facility that allows an account holder to withdraw more money than is actually available in their bank account, up to an agreed limit, effectively creating a short-term loan from the bank to cover temporary cash shortages.
Etymology
The term "the overdraft" comes from combining 'over,' meaning beyond or exceeding, and 'draft,' which originally meant a written order to pay money. The concept evolved as banking practices developed, allowing customers to write drafts exceeding their deposit balance, thus creating an 'overdraft.' Did you know the word 'draft' has its roots in Old English 'dragan,' meaning to draw or pull?
Learn to use this word actively
"The overdraft" appears in the Vocaplus list "English - Finance - (A1-C2) - set 1", containing 150 commonly used words.
Would you like to not only understand these words, but also remember them and use them actively? Create a free account and select English as the language you want to learn.
Create a free account
