What is overdraft and how do banks usually handle it?

Overdraft is an extension of credit from a bank or a lending institution that is granted when a certain account reaches zero value. The overdraft will allow the account holder to keep on withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal. Basically, an overdraft means that the bank allows customers to borrow a set amount of money. Typically, there is a fee per overdraft, an interest on the loan.

Here are the differences between the balances.

Also, whenever there is an overdraft facility on the account that is also returned separately to our users, in addition to it being added to the available sum.

• overdraft is pre-arranged overdraft limit. Available for all “TRANSACTION” and “BUSINESS_TRANSACTION” account types. See Account Types

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Here is our documentation on Data API overdraft.

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