Banking & Accounts

Overdraft Fee

A charge assessed when a transaction is processed despite insufficient funds in the account.

Banks may cover the transaction and charge a fee, or decline it, depending on the account's overdraft settings and whether the customer has opted in to overdraft coverage for debit card transactions. Repeated overdrafts can result in multiple fees in a single day, which is why building a buffer or setting up low-balance alerts is commonly recommended.

Related Articles