An overdraft occurs when there are not enough funds in the account to cover the withdrawal, but the bank still allows the transaction to go through.
An overdraft allows the client to continue paying bills even if there is not enough money.
Many banks charge extra fees or penalties for overdrafts.
An overdraft is like any other loan: the account holder pays interest on it and is usually charged a one-time fee for insufficient funds.
Overdraft protection is provided by some banks to customers when their account reaches zero; it avoids fees for insufficient funds, but often includes interest and other fees.