An overdraft occurs when money is withdrawn from a bank account in an amount that exceeds the funds available in the account.  Banks often permit this as a form of short-term loan to the account holder.Usually this situation happens when a person writes checks which total more than the balance in their checking account.  The bank often covers the checks and allows the customer to deposit more funds into the account to cover the negative balance.  Rather than charging an overdraft fee, the bank will charge interest on this short-term loan. Customers may pay for overdraft protection on their accounts so that banks will not bounce their checks when there are not enough available funds to cover them.  Usually the bank requires the checking account to be linked to another account, such as a savings account.  When an overdraft occurs, funds are automatically transferred from the savings account to cover the overdraft in the checking account. The growth of online banking services has reduced the amount of overdrafts.  Bank customers can view their accounts online and see up-to-date funds availability. Email and text alerts can be sent to warn account holders of pending transactions that may trigger an overdraft. And mobile bank deposits allow for faster transfer of funds into an account, thus eliminating float and reducing the chances of an overdraft.