ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The average overdraft fee is over $25
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IF you have overdraft protection, it’s completely unnecessary to make and follow a budget
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You are required by law to sign up for overdraft protection in order to protect your bank
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You only get charged an overdraft fee once per month, so it doesn’t matter how much you go over your account or how many times you overdrew it
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Detailed explanation-1: -Overdraft protection is a guarantee that a check, ATM, wire transfer, or debit card transaction will clear if the account balance falls below zero. There may be heavy fees and interest associated with overdraft protection, depending on the kind of linked account used.
Detailed explanation-2: -Overdraft protection is an agreement with the bank or financial institution to cover overdrafts on a checking account. This service typically involves a fee and is generally limited to a preset maximum amount.
Detailed explanation-3: -Consumer banks used to automatically add overdraft protection to all checking accounts, but now this is a feature you must opt into or formally accept.
Detailed explanation-4: -Federal laws do not specify maximum amounts for fees that banks can charge for overdrafts. These decisions are made by the bank. Banks are required to disclose any fees when the deposit account is established, and they are required to give you advance notice of any increase in a fee.