How is an overnight overdraft charge calculated?
Amount of the overnight overdraft x (federal funds rate plus 4 percentage points) / 360 days The minimum charge is $100. An overnight overdraft extending over a weekend or Reserve Bank holiday is usually considered one occurrence, though the Reserve Bank may assess a charge for each day that the negative balance is outstanding. If an institution incurs an excessive number of overnight overdrafts (more than three occurrences in any 12-month period), the overnight overdraft rate increases by one percentage point for each additional occurrence. Moreover, the Reserve Bank will take additional actions to minimize continued overnight overdrafts. These actions are similar to those taken in response to net debit cap violations (for more details please see the Account Management Guide [PDF; 10,845K]).
