Question

bank overdraft can appear only in the​

Answer 1

Answer:

Solution:

Overdraft is a financial instrument in which the money can still be withdrawn from the current or savings account, even if the account balance goes below zero. It is a type of extension of monetary limit offered by banks and that money is said to be ‘overdrawn’. An authorized overdraft limit is assigned for each customer depending on their relationship with the bank. The customer can withdraw money up till the assigned limit. Banks do charge interest rate on the money withdrawn in form of overdraft.

Key points:

• Overdraft protection is a loan provided by some banks to customers when their account reaches zero.
• The overdraft allows the customer to continue paying bills even when there is insufficient money in the customer's account(s).
• An overdraft is like any other loan, the customer pays interest on the loan and, in the case of overdrafts, will typically have a one-time insufficient funds fee.