Current bank overdraft rates
Bank overdraft is a credit facility in which the money can be withdrawn from the current or savings account, even if the account balance is zero or even below.
A Banks overdraft is a type of extension of the credit limit offered by banks. The sanctioned limit is said to be ‘overdrawn’.
An authorized Overdraft limit is assigned for each customer depending on their relationship with the bank. Banks overdraft fees customer can withdraw money up to the assigned limit. Banks charge interest rates only on the utilized amount from the total sanctioned limit and are renewed every 12 months.
Features
- Overdraft is a credit facility that can be availed by maintaining any bank account (savings or current)
- Interest rate is charged only on the utilized amount from the total sanctioned limit
- Several Private Sector and Public Sector Banks offer this facility for both salary and savings account holders
- Money extension is granted on the basis of the customer’s account value, repayment history, or credit score
- Short-term credit is provided by the Bank and needs to be repaid within the stipulated time limit, usually 12 months or even lesser
- Credit amount or Overdraft attracts interest for the time of use which can be from a couple of days to a few weeks
- The repayment tenure is decided by the bank and it has complete authority over the account and its usage
- As per the RBI regulations, current accounts and cash credit accounts are eligible for a maximum of Rs. 50,000 Overdraft per week