Overdrafts Explained | What is an Overdraft?
An overdraft is a financial service provided by banks that allows individuals to spend more money than they have in their bank account.
When someone has an overdraft, they are borrowing money from the bank, so they can make payments or withdraw cash from their current account even if the balance is zero.
Watch the video to find out what an overdraft is.
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00:01 What is an overdraft?
00:23 Example of using your overdraft
01:12 Why is an overdraft useful?
01:28 Two types of overdraft
01:36 Arranged overdrafts
02:19 Unarranged overdrafts
02:40 Negatives of an overdraft
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