Discovered in a bank account

The overdraft in a bank account is a situation in which a person remains in a negative balance in their account (debit balance), mainly due to poor economic management of the current account, although it is true that in some cases it may be due to computer errors.

There are certain accounts that allow discovered to a certain limit and there are others that do not allow it in any case.  There are two types of overdraft in a bank account:

  • Current and savings accounts:they do not allow to be uncovered (red numbers).
  • Credit accounts:if they allow overdraft, it is as if the bank granted a loan.

Those accounts that allow the account to be discounted apply an interest rate per day for the overdraft on the total balance in the account at the time of applying the penalty. The interest rate that is applied is the APR or equivalent annual rate and is prorated on a daily basis.

The reasons through which an account is overdrawn can be of many types, some examples are:

  • They have passed a receipt to the customer of the electric bill and the phone and had no balance.
  • The mortgage fee that is charged to the account on days five of each month and the customer was thought to be days six of each month.
  • He has made a purchase-sale on credit, has made a recalculation of guarantees and has no money in the account.
  • The customer has misused the credit cardand has been charged to the account associated with it.

Practical example

The most common example occurs in the payroll account when the company you work for is late in paying the payroll and you get the mobile bill worth 60 euros.

The account remains negative that same day (red numbers), suppose that day two of the month and you are not paid payroll until day 5 of that month. Imagine that the bank with whom you have domiciled your payroll charges you an interest rate of 15% APR for overdraft. In this way, the money they charge us is as follows:

First we calculate the apportionment by the number of days:

Apportionment = 3 days / 360 business days = 0.008

Subsequently, we calculate the prorated penalty for the number of days discovered, this is:

Prorated penalty = 0, oo8 * 15% = 0.0012

So:

Discovered = 0.0012 * 60 = 0.072 euros

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