Jan Dhan Account Overdraft
Have you ever thought that you can withdraw money even if the balance in your bank account is zero? If not, you will be surprised to know that this is possible. This facility is available with bank accounts opened under Pradhan Mantri Jan Dhan Yojana (PMJDY). There is no need to maintain minimum balance in Jan Dhan account. Despite this, customers can avail overdraft facility up to Rs 10000 from their zero balance account.
What is overdraft?
Overdraft means that even if there is no money in your account or the balance is zero, you can still withdraw a small amount from the bank. This can be considered as a short-term loan given to you by the bank. When the money comes to your account, you will have to return this amount to the bank. Note that some interest is charged on overdraft. This facility proves to be very helpful especially for emergency or sudden expenses.
How to get overdraft?
All bank accounts opened under Jan Dhan Yojana are Basic Savings Bank Deposit Account (BSBDA). Accident insurance benefit is also available on RuPay debit cards given with bank accounts, the limit of which is up to Rs 2 lakh. If customers want to avail this facility, they will have to go to the bank and apply for overdraft. Most banks approve it immediately, provided the customer has good conduct in the past.
Advantages and disadvantages of overdraft
In case of emergency or sudden expenditure, money is available immediately. This facility does not require a long process like a loan, it is available immediately. It charges more interest than a normal savings account. Repeated use may cause the account to become negative. The bank allows overdraft only up to a certain limit and non-payment on time may damage your credit history. Different banks may impose different charges and rules on this facility.
When and how to use?
Overdraft should be used only when necessary. This facility is extremely beneficial for incidental expenses, medical emergencies or sudden needs. With this you can withdraw money immediately without any loan process. Keep in mind that making payments on time keeps your credit record safe.