overdraft
OH-ver-draft
/ˈoʊvərdræft/
A deficit in a bank account caused by drawing more money than the account holds.
Can be authorized (an agreement with the bank) or unauthorized (leading to fees).
The story behind the word. The word 'overdraft' is a straightforward combination of 'over' and 'draft'. 'Draft' here refers to drawing money from an account (like a 'bank draft'). So, an overdraft literally means 'drawing over' the amount available in your account. It's a very descriptive term!
Word relationships
- deficit: Deficit is a general term for an amount by which something is too small; overdraft is a specific bank account deficit.
- shortfall: Shortfall is a failure to meet a target or requirement; overdraft is a specific financial shortage.
- surplus: Surplus is an amount remaining after needs are met; overdraft is a negative balance.
Word family
- overdraw (verb): to draw money from an account in excess of what is in it.
Collocations
- in overdraft
- overdraft facility
- overdraft fee
- avoid an overdraft
Example sentences
- "She was careful to monitor her spending to avoid an overdraft and the associated fees." Avoiding bank fees.
- "Some banks offer an overdraft facility, allowing customers to temporarily spend more than their balance up to a certain limit." Bank services.
Memory hook
An OVERDRAFT is when you DRAW OVER the money you have in your account. DRAW OVER
When not to use
Do not use 'overdraft' to describe any general shortage of funds; it's specific to a bank account going below zero.
Fun facts
- Before electronic banking, an overdraft might literally involve a bank manager deciding whether to honor a check written for more than the account balance.
Explore more words
deficit, overspend, withdrawal, insolvent, insolvency, overfish
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