What is the difference between cash credit and overdraft ?

1.	What is the difference between cash credit and overdraft ?
Answer» The points showing the difference between the cash credit and overdraft are: (1) Overdraft is permitted to those customers who have current account with the bank while cash credit can be granted to anyone . (2) Cash credit is granted after acquiring full security while overdraft is generally given against personal security because current account holders are old and reliable customers of bank . (3) Overdraft is given for very short period while cash credits are granted for a fixed period . (4) Interest rates charged on overdraft are higher than interest rate charged on cash credit .

Answer»

The points showing the difference between the cash credit and overdraft are:

(1) Overdraft is permitted to those customers who have current account with the bank while cash credit can be granted to anyone .

(2) Cash credit is granted after acquiring full security while overdraft is generally given against personal security because current account holders are old and reliable customers of bank .

(3) Overdraft is given for very short period while cash credits are granted for a fixed period .

(4) Interest rates charged on overdraft are higher than interest rate charged on cash credit .

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