Which of the following statements about an overdraft facility is NOT correct?
A) Banks require an overdraft facility to be operated on a fully fluctuating basis.
B) Generally, the agreed interest rate on an overdraft is calculated by the bank on the balance at the end of the month.
C) The bank lender will charge an establishment fee to cover the establishment costs of an overdraft.
D) There is an unused limit fee that is much less than the actual overdraft interest rate.

Question

Quizplus · Accepted Answer

The interest on an overdraft is typically calculated on the daily balance, not just the balance at the end of the month. This means interest is charged based on the amount overdrawn on each day of the month.

Which of the Following Statements About an Overdraft Facility Is