glossary

GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Overadvance

An overadvance is the funding of debt that will be used by a company to build its inventory prior to a high sales season (such as the winter holidays). Since the debt is taken prior to the expected spike in sales, the loan amount will temporarily exceed the company's accounts receivables balance.

Overcontribution

Overcontribution describes the deposit of funds into a tax-advantaged retirement account that exceeds the annual contribution limit as defined by the taxing authority. Overcontribution can sometimes result in monetary penalties.

Overdraft

Overdraft occurs when drafts or withdrawals exceed an account's available balance of funds. The term is used interchangeably with "insufficient funds." Overdraft can also mean an immediate credit extension, such as when there are insufficient funds in an account and the bank must extend credit to cover pending drafts.

Overdraft annual cost

Overdraft annual cost is the charge that a customer pays for having access to instant credit when a check written on an account exceeds the funds available in the account. If the bank pays the check, the accountholder is essentially borrowing money temporarily. This immediate credit access is an extra service for which most banks charge an annual fee.

Overdraft minimum amount

Overdraft minimum amount is the smallest value that a banking institution will transfer into an account when the available balance isn't sufficient to cover requested withdrawals. An account may, for example, have an overdraft minimum of $25. If the account balance is $100, and a check in the amount of $110 is presented for payment, the bank will advance the accountholder $25, rather than just the $10 overage.

Overdraft protection

Overdraft protection is a service offered on checking accounts. When a customer has it, the banking institution will pay presented checks, even if the funds available in the account aren't sufficient to cover the check amount. There's usually a fee associated with overdraft protection, as well as a per-check fee, when an overdraft situation occurs.

Overlay

Overlay is a comprehensive asset management style that has the goal of eliminating inefficient exposures that can occur when an investor has more separately managed accounts. The overlay system looks at the investor's holdings holistically, across all accounts, to identify overexposures and inefficient transactions.

Overlying mortgage

An overlying mortgage is a second mortgage, characterized by having a subordinate claim to the first mortgage on the same piece of real estate property.

Owe

To owe is to have an obligation to pay or repay.

Owner financing

Purchase of property where the finance is provided in whole or part by the seller.