If the withdrawl exceeds the balance in your account it is an overdraft. If the account provider already agreed to pay you overdraft facility on agreed terms and conditions. The interest rate charged is normal as agreed but if the balance exceeds the limit provided by the account provider then the interest rate is on the higher side apart from the fee charged. Why the overdraft in the account occurs if the account holder is negligently spends more than the deposit balance, if the account holder deposits a cheque in his account and the process of clearing is delayed or in between the depositor spends the money, these withdrawl of money leads to overdraft of the account. The bankers charge some fees and interest on the over drafted money. Some times the over drafting is permitted in the banks if both the parties have faith on each other. Now a days majority of banks provide the benefit of overdraft on the pre determined terms and conditions of interest and authorized limit is sanctioned. These rates of interest vary from bank to bank and the kind of account the account holder maintains. If the customer exceeds the agreed authorized limit then it is overdrawn money on which banks charge different kind of fee and interest on over and above the authorized limit. Broadly saying that the bank do not encourage and allow the customer to exceed the sanctioned limit. The banks also decline the transactions, which are over the authorized overdraft. Some banks provide overdraft protection when the transactions are made through the cheques, debit or credit cards or through the electronic transfers and no fees or interest is charged.