overdraft

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Overdraft

A check that is drawn on an account containing less money than the amount stated on the check.

The term overdraft is also used in reference to the condition that exists when vouchers or purchase orders are drawn in amounts exceeding the amount that has been appropriated or budgeted.

Cross-references

Commercial Paper.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

overdraft

see BANK ACCOUNT.
Collins Dictionary of Law © W.J. Stewart, 2006
References in periodicals archive ?
Account holders can often opt out of the bounce protection feature by contacting staff at the financial institution.
To what extent is bounce protection a benefit to customers?
The banking industry claims that bounce protection a) eliminates the aggravation and embarrassment of a returned check by a retailer; b) saves the cost of additional charges from some retailers for returned checks; and c) adds convenience and flexibility in managing funds.