ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -On top of the initial fee, a certain percentage is charged as interest on the deficit sum. This interest varies from bank to bank. Also, the one-time processing fee can be charged multiple times if a customer keeps making payments with an insufficient account balance.

Detailed explanation-2: -Every bank and credit union has its own limit on the number of overdraft fees it will charge in one day. You can commonly expect banks to charge a maximum of 4 to 6 overdraft fees per day per account, though a few outliers do allow as many as 12 in one day.

Detailed explanation-3: -Some banks also may charge what are known as continuous overdraft fees, or daily overdraft fees. These are charges assessed every day the account remains overdrawn.

Detailed explanation-4: -Your bank may close your account and send you to collections if you’re always in overdraft and/or don’t bring your account up to date. Monitoring your account closely and linking your checking account to a backup savings account can help you avoid overdraft fees.

Detailed explanation-5: -Overdraft fees, usually around $30-$35, are for transactions that result in a negative account balance. If there are multiple transactions, the bank may charge multiple fees. For example, with a $35 fee, three overdrafts in one day could result in fees that total $105.