Overdraft facility is provided by almost every bank on savings and current accounts. A limit on overdraft is decided by the bank. You can withdraw amount up to this limit with the help of your ATM card. This is a kind of loan, hence it has to be returned along with interest.
New Delhi. If you are going to open a new bank account, then definitely ask whether you are getting overdraft facility on it. Even if you already have an account, inquire about it from your bank. Overdraft or OD facility can be very useful to you in times of trouble. People who have Jan Dhan account get this facility. Today we will tell you about what is overdraft facility and how to get it.
Overdraft is a type of loan that the bank offers you. However, its special thing is that for this you do not need to go to the bank and fill the form or wait. You get instant OD facility. You can withdraw money from any ATM. However, it is decided in advance how much money you will get.
What is OD’s law?
Every bank can decide the amount of OD differently. For example, if someone has a Jan Dhan account, he can get Rs 10,000 under OD. That person can withdraw this money directly from the ATM. There is no need to keep money in your account to withdraw money under overdraft. Even if a person having a Jan Dhan account has zero balance in his account, he can withdraw Rs 10,000. He then has to return this amount with interest. It is worth noting that OD is not only for Rs 10,000. Many banks offer OD accounts for more than this amount. But you will also have to take care of maintaining minimum balance in those accounts.
How much will be the interest?
The interest on OD received on Jan Dhan account can range from 2 to 12 percent. It will depend on different banks but the interest will not be above 12 percent. If the overdraft facility of a bank is Rs 50,000 and the customer has withdrawn Rs 10,000 from it, then interest will be charged only on Rs 10,000 and not on Rs 50,000. It is advised to use overdraft only in emergency situations.
