overdraft-protection

Vocabulary Word

Definition

'Overdraft-Protection' is a service offered by banks. If you try to spend more than what is available in your bank account, 'Overdraft-Protection' lets the transaction go through by lending you the extra money needed, often for a fee. Think of it like a safety net for your bank account.

Examples in Different Contexts

In banking, 'overdraft protection' is a service that prevents checks, debit card transactions, and other withdrawals from causing an overdraft. A bank representative might explain, 'Overdraft protection can link your checking account to a savings account or credit line to cover transactions that exceed your balance.'

Practice Scenarios

Business

Scenario:

Our quarterly forecast suggests we might run into a cash crunch next month. It would be prudent to have a contingency plan.

Response:

It might be wise to activate our overdraft protection service to prevent any business interruption.

Operations

Scenario:

We do have a slight delay in our payments due to unexpected expenses. How can we avoid any work disruption?

Response:

Could we possibly use our overdraft protection to ensure that payments continue to flow smoothly?