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Overdraft without security, cash credit against inventory or stock
-Under cash credit account cash credit is given using separate account, where as overdraft is given using same old overdraft account
- For "cash credit account" cash credit is given against the organization's inventory, where as overdraft is given against its fixed assets.
- Cash Credit is usually temporary , where as overdraft is a long term dealing with the bank, where cash is withdrawn on a regular basis
Overdraft is a facility, which can be availed as per the previous record and goodwill and to present the financial report.
Cash Credit is a loan can be obtained against company assets or stocks/ inventory base or with third party guarantee
Credit facility is secured by security while overdraft facility can be obtained with past history report.
Cash credit can be taken from a Bank as a working Capital against hypothecation of Stock ,& Debtors. But Overdraft can be taken against any Financial instrument Like Fixed Deposit Receipt, Insurance Policy, Shares, Mutual Funds etc.
Overdraft account is like a loan which banks give it to customers but banks require customers to open Certificate of Deposit (CD) to be guarantee or Collateral. Customers can't cash the CD during the loan period.
Cash Credit Account or Line of Credit is like a loan as well but banks require without collateral or guarantee to customers. it's similar like credit card which you can use it whatever and whenever you prefer.
Over draft account is the account that let customer withdrew more than its available in his account and then he will appear with outstanding or over drawing
Cash credit account is the account that let customer withdraw only the available amount in the account without going over drawing
agree with Mr Mina Macar
