NGPF Banking Practice Test

Overdraft protection works by linking your checking account to another source of funds, such as a savings account or a line of credit. When a transaction would overdraw the account, the bank uses the linked source to cover the shortfall so the payment goes through. This helps you avoid declined transactions and overdraft fees, though there may be transfer fees or interest on the borrowed amount. The key idea is the connection between accounts or lines of credit to cover amounts that exceed available funds. The other options don’t fit: they describe increasing interest on all accounts, automatically closing the account after an overdraft, or preventing any posting at all—none of which capture how overdraft protection actually works.