What advantage does a bank overdraft provide to account holders?

A bank overdraft provides significant flexibility to account holders by allowing them to withdraw more money than what is currently available in their bank account. This is particularly advantageous in managing cash flow, especially for individuals or businesses that may experience temporary shortages of funds. With this facility, account holders can cover unexpected expenses, manage ongoing payments, or seize sudden financial opportunities without needing to wait for their account balance to replenish.

The other options do not accurately define the primary benefit of a bank overdraft. For instance, while unlimited withdrawals may seem appealing, overdrafts typically come with a limit set by the bank. Similarly, an interest-free loan is not associated with an overdraft; this facility usually incurs interest on the amount overdrawn. Lastly, securing large investments is not a characteristic of overdrafts, as they are meant for short-term financial needs rather than substantial long-term financial commitments. Therefore, the defining aspect of a bank overdraft is indeed its ability to allow withdrawals that exceed the existing account balance.