Question

Distinction between:
Overdraft and Cash Credit.

Answer 1

	Overdraft		Cash Credit
1)	Meaning: It is a credit facility given to current account holder to draw more than the credit balance in his account, subject to overdraft limit sanctioned.	1)	Meaning: It is a loan facility given by a bank in which certain amount is called in the account of the customer.
2)	Duration: Overdraft is a temporary loan given for a short period.	2)	Duration: Cash credit facility is for longer period than overdraft facility.
3)	Interest: Interest is changed on the actual amount overdrawn.	3)	Interest: Interest is charged on the amount actually withdrawn.
4)	To whom facility given: Overdraft facility is given only to current account holder.	4)	To whom facility given: Cash credit facility is given to regular bank customers and even to outsiders.