Intraday loan that occurs when a bank transfers funds in excess of its Reserve Account. Daylight overdrafts are caused when banks transfer funds in excess of reserve account balances at a Federal Reserve Bank. Since 1994 Federal Reserve Banks have charged banks a processing fee for daylight overdrafts. See also Bilateral Credit Limit; Net Settlement; Sender Net Debit Cap.
Occurs when a clearinghouse bank issues a payment during the day that is in excess of the originator's reserve account balance. Daylight overdrafts must be covered by the end of the business day.
In order to encourage banks to manage and reduce potential default risks, the Federal Reserve Board assesses a charge for daylight overdrafts.
From coins to credit, find out how the earliest system of money management started. The Evolution Of Banking
Find out what tools the Fed has at its disposal to fight the good fight. The Federal Reserve's Fight Against Recession
Are my investments insured?
Find out how these two agencies create policies to stimulate the economy in tough economic times. The Treasury And The Federal Reserve
Find out how this institution has stabilized the U.S. economy during economic downturn. How The Federal Reserve Was Formed
The policies of these banks affect the currency market like nothing else. See what makes them tick. Get To Know The Major Central Banks