Question

Overdraft protection plans prevent you from experiencing an insufficient funds, or overdraft, situation. In general, they do this by providing an inflow of money into your account that is at least sufficient to cover your: O Bad checks or similar withdrawals Insufficient funds (NSF) fees and penalties There are three principal arrangements that may be used to provide overdraft protection to a checking account holder: an automatic funds transfer agreement, an automatic overdraft loan agreement, and courtesy, or "opt-in" overdraft/bounce protection. How do they compare? The methods differ in the all similar in that each is used to remedy the insufficient funds situation. However, they are expensive than the practice of good checking account management. Read each of the following statements, and indicate which overdraft protection arrangement is being described. This program frequently necessitates transfers of fixed increments (e.g., $100) and may result in greater-than-desired transfers and resulting interest charges. This describes: This program incurs a relatively lower cost since it utilizes the account holder's own funds and merely necessitates a transfer fee. This describes: A potential overdraft is prevented by automatically transferring funds from the account holder's savings account into his or her checking account. This describes:

Answer 1

The methods differ in the approach used to remedy the insufficient funds situation, however they are all similar in that each is quite expensive than the practice of good checking account management.

1. This program frequently necessitates transfers of fixed increements and may result in greater than desired transfers and resultimg interest charges. This describes- Opt-in Overdraft /Bounce Protection

2. This program incurs a relatively lower cost since it utilizes the account holder's own funds and merely necessitates a transfer fee. This describes - Automamatic overdraft loan agreement.

3. A potential overdraft is prevented by automatically transferring funds from the account holder's savings account into his or her checking account. This Describes - Automatic funds transfer agreement.