What is an "overdraft"?

What is an "overdraft"?

Mitchell Freedman, CPA/PFS (CEO, MFAC Financial Advisors) gives expert video advice on: What kinds of bank accounts should I have?; How do I open a bank account?; How can I compare banks and the services they offer? and more...

Hopefully, you will not write a check and have insufficient funds in the checking account, meaning you've written a check for more money than has been deposited. If you did, you'd have an overdrawn account or an overdraft or, as we say, an "OD". An individual may become overdrawn if they do not keep a running record of the deposits that they've put into the account less the withdrawals or checks that they've written from the account.