In times of sudden financial need, having an empty bank account can pose significant challenges.
However, there’s a solution that many may not be aware of: the Bank Overdraft Facility.
This facility allows account holders to withdraw money from the bank even when their account balance is zero, providing a lifeline during emergencies.
Key Details about Overdraft Facility:
Overdraft is essentially a type of loan offered by banks to their customers.
Unlike traditional loans, overdrafts do not require lengthy application processes or forms; the facility is readily available to eligible account holders.
Account holders can withdraw funds through ATM or other channels, depending on the bank’s policy.
The withdrawal limit is determined by the bank, and interest is calculated on a daily basis, distinguishing it from conventional loans.
While loans typically accrue monthly interest, overdrafts may incur higher interest rates due to daily interest calculations.
Eligibility and Criteria for Availing Overdraft:
Basic Savings Account holders who have maintained their accounts well for at least six months are eligible for overdraft facilities.
The account must be linked to the Aadhaar number.
This facility is also extended to Jan Dhan account holders.
Applicants must be aged between 18 to 65 years to qualify for overdraft benefits.
How to Access Overdraft Facility:
Upon opening an account with a bank, inquire about their overdraft facility.
Account holders meeting the eligibility criteria can avail themselves of overdraft facilities, typically up to Rs 10,000.
