Overdraft Protection
/ˈoʊvərˌdræft prəˈtɛkʃən/
Definitions
- (n.) A banking service that automatically covers withdrawals exceeding the account balance to prevent declined transactions or fees.
The customer enrolled in overdraft protection to avoid bounced checks.
- (n.) A contractual agreement between a bank and account holder allowing temporary negative balances up to a set limit.
The overdraft protection agreement specified fees and credit limits.
Related terms
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Commentary
Overdraft protection terms should be clearly defined in contracts to clarify fees, limits, and borrower obligations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.