What Does It Mean When Your Bank Account Is Overdrawn?
An overdrawn bank account has dropped below $0. So if your balance says -$25, you’re $25 below zero because more money went out of the account than was available.
That’s really all “overdrawn” is describing. It can sound like something happened to the account, when it’s actually just the name for where the balance ended up.
You Can Be Short Without Going Below Zero
You can have too little money in your account for a payment without the account actually going below zero.
Say you have $40 available and a $50 payment comes through. If the payment is declined or returned, you still didn’t have enough money for it, but the payment didn’t take your account below $0.
If that $50 payment does go through, though, your balance could drop to -$10. That’s when the account is overdrawn.
So there’s a small but important difference. You can be short on money for a payment without being overdrawn. The account is overdrawn once the balance actually drops below zero.
Your Balance Can Go Negative Later
The payment that puts your account below zero doesn’t always show up right away.
A debit card purchase may show as pending before the money actually leaves your account. Checks and automatic payments can also be processed later, even if you made them earlier. By the time they go through, other payments may have already reduced your balance.
So you could see money available earlier and then come back to a negative balance later. The payment that put the account below zero may be one you made before the balance ever looked overdrawn.
What Happens Next May Vary
Going below zero doesn’t automatically tell you what else will happen with the account. One payment might go through while another could be declined or returned. And an overdrawn account doesn’t automatically mean there’s an overdraft fee.
A lot of that depends on the type of payment and how the bank handles an overdrawn account. So two accounts can both be below zero without everything that happens next being the same.
If you’re seeing an issue with your account, your bank or credit union can explain what happened.