What is the purpose of overdrive (automatic type)? Does it save fuel consumption?

No. It varies on different cars, but usually holds transmission in a lower gear for longer to assist in overtaking. etc.

it’s fourth gear i suppose it like 5 gear in a manual car.

Overdrive does save gas when used properly. It is mainly for interstate driving (60 mph+).

overdrive is an extra ratio in the trans. the overdrive is there to save fuel on a trip and is not designed to work at low speeds or under heavy loads. it works by reducing engine revs, thus saving fuel. overdrive is different to ‘power/economy switch’ this just varies shift points in the trans.

Overdrive gears slow the speed of the vehicle’s engine, reducing fuel consumption and extending the life of the engine

The first answer is incorrect. It does help save fuel. In modern automatics it quickly upshifts into final drive gear so the engine runs at minimum rpms. Taking a car out of overdrive allows the ngine to rev more, and not shift as often, giving you more low-end torque but using more fuel in the process. Use overdrive to save fuel unless you’re carrying a load through mountains and find the car shifting down a lot and being annoying.

Yes.

Yes, the first answer is wrong. I figure he was thinking about passing gear rather than overdrive. There is usually a way to defeat the overdrive when you need to, sometimes a button on the shifter, other times D instead of OD on the indicator. It gives a slightly higher gear ratio in over drive. If top gear gives, for example, a 1:1 ratio, OD would give a 0.75:1 ratio.