You can go to any bank that you have a bank account with and ask for an overdraft account. Whether or not they give you an OD facility depends on the following factors:
a. The type of bank account you have
b. Your history with the bank
c. Your monthly salary
d. Whether your salary gets credited to this account
e. Can you provide collateral like Fixed Deposit or Gold etc.
The chances of getting an overdraft are significantly higher for people having a salary account and even higher for people who can provide collateral.
yes it is an asset overdraft
Would you classify a Bank Overdraft as Cash? If Yes, why?
interest on bank overdraft.
These two terms are different.For a bank overdraft, you should have an account with the bank and it is a limit on borrowing on a bank current account. With an overdraft the amount of borrowing may vary on a daily basis.A bank loan is a fixed amount for a fixed term with regular fixed repayments. The interest on a loan tends to be lower than an overdraft.
Bank overdraft charges are the result of someone spending more money than they have in their bank account. The bank then charges interest on the overdrawn amount.
Debit cash / bankCredit loan from bank / bank overdraft
Debit cash / bankCredit bank overdraft
yes it is an asset overdraft
Would you classify a Bank Overdraft as Cash? If Yes, why?
Your income & your ability to repay the money provided as overdraft
For an overdraft, the journal entry would be to debit the bank account (increasing the overdraft liability) and credit the corresponding expense account or accounts that led to the overdraft. This reflects the additional amount drawn from the bank account beyond the available balance.
interest on bank overdraft.
do you have to pay interest on a band overdraft ?
These two terms are different.For a bank overdraft, you should have an account with the bank and it is a limit on borrowing on a bank current account. With an overdraft the amount of borrowing may vary on a daily basis.A bank loan is a fixed amount for a fixed term with regular fixed repayments. The interest on a loan tends to be lower than an overdraft.
Bank overdraft charges are the result of someone spending more money than they have in their bank account. The bank then charges interest on the overdrawn amount.
Yes. Overdraft is like an advance where you take cash from your overdraft account (even though you do not have equivalent bank balance) and then you repay the money to the bank once you have raised enough funding to repay the same. The bank would charge you an overdraft fee + interest for the money you borrowed from them
A bank overdraft is when someone is able to spend more than what is actually in their bank account. Obviously the money doesn't belong to them but belongs to the bank so this money will need to be paid back; normally automatically done when money goes into the persons account. The overdraft will be limited. A bank overdraft is also a type of loan as the money is technically borrowed.