What is an overdraft facility?

A type of savings account A long-term loan A short-term credit agreement A type of investment fund

How is the interest on an overdraft facility calculated?

Monthly on the entire approved limit Annually on the average balance Daily on the amount used Only when the account is closed

Which of the following is NOT a type of collateral that can be used for a secured overdraft facility?

Salary Fixed Deposits Insurance Policies Credit Card Debt

What is the typical overdraft limit allowed against a fixed deposit?

10% of the fixed deposit amount 25% of the fixed deposit amount 50% of the fixed deposit amount 75% of the fixed deposit amount

Which of the following bank accounts is typically eligible for an overdraft facility?

Current account Savings account Deposit account All of the above

What is a key difference between an overdraft account and a personal loan?

Overdraft accounts have a fixed interest rate, while personal loans can have variable rates Personal loans require monthly repayments, while overdraft accounts do not Overdraft accounts are secured loans, while personal loans are unsecured Personal loans are only available to businesses, while overdraft accounts are available to individuals