See also, average balance. See also, overdraft. When the amount of a paid check or other withdrawal exceeds the available balance in a checking account. See also, NSF and overdraft protection. A service that allows a checking or money market account to be linked to another account that provides protection against returned items or overdrafts.
Choices can include using a savings account or a line of credit loan account to provide protection.
Promissory note Contract between a borrower and a lender that includes terms and conditions under which the borrower promises to repay the loan. Simple interest Interest calculated on the principal only. Uncollected funds Refers to items deposited in an account that have not yet been collected, or paid, by the bank on which they were drawn. Variable interest Rate of interest that is tied to a certain index and changes periodically based on changes in the index. An interest rate that may fluctuate during the term of a loan, line of credit or deposit account according to changes in an index rate, such as the prime rate or other prescribed criteria.