Categories: Business

You can Withdraw money from your bank account even have zero balance You can withdraw money even after the bank account is empty, banks give facility of overdraft

Photo: ECONOMIC TIMES

You can Withdraw money from your bank account even have zero balance

new Delhi. Your bank account is empty and if you suddenly need money, what will you do. If you are hesitant to ask for help or do not have time to take a personal loan, then you can take advantage of the overdraft facility of your bank. Overdraft facility is the facility under which you can withdraw money from the account even if there is no money in your bank account. For this, you will have to pay interest only. Almost all banks provide overdraft facility to their customers.

How to apply

To avail this facility, you have to go to the bank or apply online. Most banks charge a percentage of the total amount charged for overdraft facility as processing fee. The bank offers this facility automatically to certain people, while some customers have to apply for it.

An overdraft facility is a type of loan, given as per the customer's requirement. Banks provide overdraft facility both by guarantee and without guarantee. The facility of overdraft also depends to a large extent on how the customer has a relationship with the bank.

Salary Overdraft: Customers can take an overdraft on their salary account. An overdraft of two to three times the salary can be taken. Overdraft facility can be availed quickly and easily from the bank where you have your salary account.

Home overdraft: Banks also provide overdraft facilities to home loan customers. Overdrafts can be found in 50 to 60 percent of the total value of the property. For this, the ability of the customer to repay the loan and credit history is also assessed.

Insurance Policy Overdraft: You can take the facility of overdraft on your insurance policy by keeping it with the bank as a guarantee. The overdraft amount is decided on the basis of the sum assured of the insurance cover.

FD overdraft: An individual can also take an overdraft on his fixed deposit (FD). Overdrafts up to 75 percent of the total amount of FD can be found. Interest on this also seems low. Banks usually charge 2 percent more than the interest earned on FDs.

How overdraft works

Customers can withdraw money from their bank account at any time after the bank provides the facility of overdraft. The amount of the overdraft may vary depending on the customer. After taking an overdraft, you have to return it to the bank, just like you repay the loan. The bank charges interest till you return the full amount. The interest is charged on a daily basis. As you deposit money in the account, the outstanding balance decreases and the interest amount on it also decreases accordingly.

This post was published on August 25, 2020 10:21 am

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