A businessman has two options while taking a loan for his business. Either to opt for long term funding like LAP (Loan against property) or to go for flexible funding like Cash Credit (CC) or Overdraft (OD). Long term funding generally carries a lower rate of interest while flexible funding gives opportunity to save interest by depositing extra funds in the account and thus paying interest only for amount needed.

OD account stands for Overdraft account. It is a type of account in which you can withdraw amount even if there is no fund in your account. The bank sanctions a specific limit and your account can go in negative up to that limit.  You have to pay interest only on the amount taken as loan. Since it is a current account, you can make as many transaction as you want. You have to pay interest on the amount which is due by the end of the day.