Your savings bank account may be running out of money gradually and you would be needing more soon. since the lockdown has been extended till May 3. If money inflow into your savings bank account is not happening, then they do not really need to worry too much. Those who are salaried can easily get money into their savings bank account by using the overdraft facility. Those who don't have any salary account, can use overdraft facility against their FD (Fixed Deposit). As per the Reserve Bank of India (RBI) rules, any of the current account holders or savings account holders can get up to Rs 50,000 overdraft facility in a week. Majority of the Indian banks are giving this overdraft facility to its savings account and current account holders. Bank customers can avail this overdraft account facility by paying some annual charges for it.

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Bank customers can start or discontinue this overdraft facility any time they want. So, during the COVID-19 lockdown, this overdraft facility can be a great option for you.

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Overdraft Facility Meaning

Salary cum savings account holders can avail of overdraft limit of about half of their salary to three times of their monthly salary in overdraft account. 

Significantly, the overdraft facility is also available under PMJDY (Pradhan Mantri Jan Dhan Yojana). Yes, PMJDY account holders can also exercise overdraft facility under Jan Dhan Yojana. Jan Dhan account holders can get overdraft facility by getting up to Rs 5,000 in their overdraft account, but for that, there should be satisfactory bank transaction being taken in the PMJDY account in last six months.

Overdraft Eligibility-Public vs Private Banks

Those savings bank account holders who have better credit history or CIBIL score are easily given overdraft facility by the banks. Your account history also plays a major role in getting the overdraft facility. Overdraft interest rate is applicable as per the bank rules as overdraft interest rate varies from around 9 per cent to 18 per cent. So, it's advisable to get overdraft facility from the Public Sector Banks as they levy least overdraft interest rate in comparison to private banks and NBFCs.

Overdraft Facility Benefit

The overdraft facility is charged less than the unsecured personal loan or credit card loan. Apart from this, in overdraft facility you need to pay only for the period for which you have availed the overdraft facility. So, subscribing to overdraft facility doesn't mean you have to pay for this bank service, even though you are not availing of this facility. Compared to personal loan, you need not pay processing charges in overdraft facility and the overdraft interest rate is very low in comparison to the personal loan interest rate. Most importantly, both are non-secured loans.