Which of the following statement(s) is/are not true about overdraft?begin{enumerate}item It occurs when the account balance reaches the level of minimum balance.item It is a form of credit extended by a creditor when the account balance reaches zero.item Overdrafts allow bank clients to withdraw money even when there are no funds in the account.end{enumerate}

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which of the following statement(s) is/are not true about overdraft?

A	Only 1 and 2
B	Only 2
C	Only 1 and 3
D	Only 1

Explanation:

Detailed explanation-1: -An overdraft occurs when there isn’t enough money in an account to cover a transaction or withdrawal, but the bank allows the transaction anyway.

Detailed explanation-2: -Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank. This is shown in the cash book as a credit balance.

Detailed explanation-3: -Yes, you can withdraw cash from your overdraft facility by using a cash machine. How much you can take out depends on what your daily limit is.

Detailed explanation-4: -If you choose to opt in to debit card and ATM overdraft, you are usually allowed to make ATM withdrawals and debit card purchases even if you do not have enough funds at the time of the transaction. However, you will generally incur fees on transactions that settle against a negative balance later.

There is 1 question to complete.