Overdraft Cap

See: Overdraft. See: Overdraft Protection.

You have a cap, or a limit, or a max number that you can protect in a given overdraft situation, i.e. where you have written a check for more than you have in your bank account and the bank will still cover it.

That is, you had $1,732 in there and wrote a check for $2,000 for those really awesome skis and boots. You are $268 over-drafted, and the bank will make good on that amount of money and then send you an urgent notice about it, hoping you'll quickly wire in money from another account you have to make yourself whole in that account.

But there's a limit to a bank's bankiness. They will only overdraft protect you for some maximum amount. You'll have max cap; that is, you won't be able to write a draft check that'd put you three grand over your max. At that point, the bank Nancy Reagans. (They just say "no.")