What is the Full form of TOD in Banking

Full form of TOD in banking is Temporary Overdraft.

Overdraft is a type of short term loan  available  for financing various Business expenses . It is a Facility that allows a customer to withdraw more funds from his current account even if the balance in current account is less than 0 It is a cost effective credit line as Interest is to be paid only on the amount of funds used and not on the credit limit available

Temporary Overdraft (TOD) is a subcategory of Overdraft, and one of the most popular ways of availing an immediate short term credit and meet urgent cash requirements or unexpected payments

Various features of TOD are:

1. Can be taken for upto 2 months as per the requirement of the account holder
2. Interest is applicable on TOD  varies from Bank to Bank depending upon the amount of TOD and the number of days for which it is taken
3. The interest rate on TOD is generally higher as compared to the Interest rate on regular Overdraft facility.
4. No Collateral or Security is required for TOD
5. TOD is provided for a specific business purpose only
6. One should have an overdraft limit with the Bank in order to get a TOD.

Temporary overdraft  addresses a customers short term Financial need  and is an affordable means  to meet temporary fund requirement.