BANKING AFFAIRS

Detailed explanation-1: -Overdraft protection: Overdraft protection is a bank service that automatically transfers money from a linked savings account when there’s not enough in your checking account to cover things like debit transactions, checks or electronic payments.

Detailed explanation-2: -When insufficient funds are in an account, a banking firm normally refuses to process the payment and may charge a fee or penalize the client. To avoid the penalty on insufficient funds, many people opt for the overdraft facility through which the bank allows them to pay more than the available balance.

Detailed explanation-3: -When payment cannot be completed it is often considered as “bounced.” If a bank receives a check written on an account with insufficient funds, the bank can refuse payment and charge the account holder an NSF fee. Additionally, a penalty or fee may be charged by the merchant for the returned check.

Detailed explanation-4: -An overdraft occurs when you don’t have enough money in your account to cover a transaction, and the bank or credit union pays for it anyway. Transactions include ATM withdrawals and debit card purchases as well as checks and ACH payments (such as online bill payments).