Daylight Overdraft

Dictionary Says

Definition of 'Daylight Overdraft'

Occurs when a clearinghouse bank issues a payment during the day that is in excess of the originator's reserve account balance. Daylight overdrafts must be covered by the end of the business day.
Investopedia Says

Investopedia explains 'Daylight Overdraft'

In order to encourage banks to manage and reduce potential default risks, the Federal Reserve Board assesses a charge for daylight overdrafts.

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Related Definitions

  1. Clearing House

    An agency or ...
  2. Federal Reserve Board - FRB

    The governing ...
  3. Reserve Requirements

    Requirements ...
  4. Federal Reserve Bank

    The banks that ...
  5. Overdraft

    An extension of ...
  6. Default

    1. The failure ...
  7. Default Risk

    The event in ...
  8. Bankruptcy

    A legal ...
  9. Overdraft Cap

    The maximum ...
  10. Alan Greenspan

    The former ...

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