ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Basically, an overdraft means that the bank allows customers to borrow a set amount of money. There is interest on the loan, and there is typically a fee per overdraft. At many banks, an overdraft fee can run upwards of $35.

Detailed explanation-2: -Overdraft fees occur when you don’t have enough money in your account to cover your transactions. The cost for overdraft fees varies by bank, but they may cost around $35 per transaction. These fees can add up quickly and can have ripple effects that are costly.

Detailed explanation-3: -If your balance goes into overdraft, the funds are transferred automatically to your checking account to cover the difference. In other cases, the bank won’t return the transaction and process it, which means you’ll be charged fees until you deposit money to cover the difference.

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).

Detailed explanation-5: -Your bank can ask you to pay off all of the money you owe them at any time. They might do this if you keep going over your agreed limit. You should contact your bank if they tell you they’re going to restrict or remove your overdraft.