overdraft

thumb|"I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I – I withdraw my overdraft!" ---- Cartoon from Punch (magazine)|Punch Magazine Vol. 152, June 27, 1917

An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. In these situations the account is said to be "overdrawn". In the economic system, if there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate. If the negative balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.