Question

Overdraft facility is given to a certain definite account holder. Answer in a word / phrase / term.

Answer 1

A current account holder enjoys the overdraft facility. The term “overdraft facility” means that a temporary arrangement is made whereby a customer is allowed to withdraw an amount of money greater than his prevailing account balance. For this overdraft facility, the bank charges interest on the amount overdrawn.

Answer 2

An overdraft facility is given to a certain definite account holder is the current account.

Explanation:

• The current account is running an account in which the amount can be withdrawn and deposited without any limit.
• No restriction has been imposed on it relating to the number of times the account shall be operated during a day, week or month.
• Any money can be deposited in a current account is repayable on demand; therefore the banker is expected to maintain sufficient reserves to meet the demands of the customers.

Learn more about overdraft facility:

Name the deposit account which allows Overdraft facility. Mention any other feature of that deposit account.

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Overdraft facility is given to savings account holder. true or false with reasons.​

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