See: Overdraft. See: Overdraft Protection.
You have a cap, or a limit, or a max number that you can protect in a given overdraft situation, i.e. where you have written a check for more than you have in your bank account and the bank will still cover it.
That is, you had $1,732 in there and wrote a check for $2,000 for those really awesome skis and boots. You are $268 over-drafted, and the bank will make good on that amount of money and then send you an urgent notice about it, hoping you'll quickly wire in money from another account you have to make yourself whole in that account.
But there's a limit to a bank's bankiness. They will only overdraft protect you for some maximum amount. You'll have max cap; that is, you won't be able to write a draft check that'd put you three grand over your max. At that point, the bank Nancy Reagans. (They just say "no.")
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Finance: What is overdraft protection?0 Views
and finance Allah shmoop What is overdraft protection When it's
super windy You wear a heavy parka Or maybe when
your country's at war and you're worried about being conscripted
into the Army you pretend to have a highly contagious
venereal disease Yeah that's overdraft Not so much So what
is a draft Financially speaking it's a signature on a
cheque or some other financing A piece of paper which
draws money from one bank account making it payable to
someone else's bank account Technically bill payers quote draw money
unquote And the old timey English way of saying that
was that They drafted money and the phrase literally came
from the beer or need to pouring bartender who would
draft you no or draw another point So in the
banking world you can only draw draft up to the
amount of beer that you have available to pour Nothing
Maur If you try to overdraw that amount nothing happens
beyond the sound of air Far king gently out of
the tap head of the beer thing because the draft
is a promise to pay Hey when trans actors don't
do this properly and they draft or draw more money
than they have available to pay in their account than
the event is tantamount to a broken promise to pay
or a beer fart So it's really a big deal
And most bank account holders are happy to have a
kind of insurance embedded in their account that protects them
from this 15 yard penalty harming their credit rating And
a bad credit rating will usually ends up meaning that
they pay a lot more when they try to win
a home mortgage or get a car loan or a
credit card So the pain here is felt An overdraft
protection works now more or less like a financial condom
Just keep your fingers crossed It's at least 97% effective 00:01:38.44 --> [endTime] Oh