At what time does the Bank record the Overdraft "used amount" for charging interest for the day?

[kumar111]

As many of us know , interest is charged on the utilised amount of the overdraft limit on a daily basis..

I am curious to know , at what particular time does the Bank will record the 'usage' on the overdraft amount?

For eg : if bank records it at 10pm every day .. that means .If one withdraws amount from overdraft in the morning and deposit it bank before 10pm .... That doesn't count as per the bank as the usage? And no interest is charged?

Waiting for your answers..

 

[sjmajumder]

A bank calculates interest on an overdraft account based on the minimum balance maintained throughout the day, not the closing balance at the end of the day. If a person withdraws a significant amount in the morning and later deposits it back before the bank closes, the interest will still be charged on the lowest balance recorded during the day. This means that even if the account balance is fully restored by the end of the day, the interest will be applied to the amount that was withdrawn for the duration it remained outstanding.

Additionally, in any overdraft account, the minimum balance and the due amount (the outstanding liability) are reciprocal to each other. A lower balance means a higher due amount, which directly affects the interest calculation.

The same principle applies to savings accounts as well. When a bank pays interest on a savings account, it considers the lowest recorded balance of the day. Even if the account had millions at some point during the day, the interest will be calculated based on the minimum balance that was maintained.

Absolute INCORRECT info.

All interest is calculated on day end balance both for SB and ODby all banks.

 

[hender]

Absolute INCORRECT info.

All interest is calculated on day end balance both for SB and ODby all banks.

Thanks for clarifying the confusion, around.