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overdraft protection

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Definition of overdraft protection

Overdraft Protection Image 1

overdraft protection

A short-term source of credit which allows you to overdraw on your account up to a pre-established limit. For example, overdraft protection spares customers both the cost and the personal embarrassment of NSF cheques. overdraft protection is attached to your PCF Chequing Account.


Overdraft Protection

Is an agreement with the Bank or Financial Institution to cover overdrafts. This service will typically involve a fee and be limited to a pre-set maximum amount.



Related Terms:

Bank overdraft

Money owed to the bank in a cheque account where payments exceed receipts.


Call protection

A feature of some callable bonds that establishes an initial period when the bonds may not be
called.


Consumer Credit Protection Act

A federal Act specifying the proportion of
total pay that may be garnished.


Creditor Proof Protection

The creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules.
The provincial insurance acts protect life insurance products which have a family class beneficiary. Family class beneficiaries include the spouse, parent, child or grandchild of the life insured, except in Quebec, where creditor protection rules apply to spouse, ascendants and descendants of the insured. Investments sold by other financial institutions do not offer the same security should the holder go bankrupt. There are also circumstances under which the creditor proof protections do not hold for life insurance products. Federal bankruptcy law disallows the protection for any transfers made within one year of bankruptcy. In addition, should it be found that a person shifted money to an insurance company fund in bad faith for the specific purpose of avoiding creditors, these funds will not be creditor proof.



Overdraft

The amount by which a check or other payments exceeds the funds on deposits.


Overdraft System

System whereby a depositor may write cheques in excess of the balance, with the bank automatically extending a loan to cover the shortage.


Overdraft Protection Image 2

Personal Overdraft Facility

A loan facility on a customers account at a financial institution allowing the customer to overdraw up to a certain agreed limit for an agreed period.


Protectionism

Protecting domestic industry from import competition by means of tariffs, quotas, and other
trade barriers.


Protectionism

Policy of tariffs or import quotas to protect domestic producers from foreign competition.



 

 

 

 

 

 

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