An overdraft fee is a charge that a bank imposes when a customer withdraws more money from their account than is available. This can happen with checks, debit card purchases, or ATM withdrawals. The fee is typically a fixed amount, which can vary by bank, and is meant to cover the risk the bank takes when allowing the account to go into a negative balance. When an account is overdrawn, the bank may cover the transaction, allowing the customer to complete the purchase. However, this convenience comes at a cost, as repeated overdrafts can lead to significant fees. Customers can often avoid these fees by monitoring their account balances and opting for overdraft protection services offered by their bank.