Question

An agreement with a bank which allows you to draw money when you have no money left in your account is called

Answer 1

It occurs generally in current account. This type of account is only given to those whose transactions occour regularly. And this facility is called Overdraft.

Answer 2

Answer:

The correct answer is Overdraft.

Explanation:

An agreement with a bank which allows you to draw money when you have no money left in your account is called Overdraft

The overdraft allows the account holder to continue withdrawing money even if the account is empty or has insufficient cash to pay the withdrawal amount. An overdraft simply implies that the bank permits consumers to borrow a certain amount of money.

• An overdraft happens when there is insufficient money in an account to fund a transaction or withdrawal, but the bank nonetheless approves the transaction.
• Essentially, it is a financial institution's extension of credit issued when an account reaches zero.
• An overdraft is similar to any other loan in that the account holder pays interest and is often assessed a one-time insufficient funds fee.
• Some banks offer overdraft protection to consumers when their account reaches zero; it prevents insufficient funds charges but frequently includes interest and other fees.

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