Defined

• For bank accounts, debit interest is a penalty for customers who overdraft their account by spending more money than is in the account. Debit notes--which represent a loan between parties--may have fees or penalties for late payments or loan default.
  
  

Features

• Bank account debit interest is often a flat fee for overdrafts, such as $25 or $50. The flat fees may increase for repeated offenses. Debit note interest may be 1 or 2 percent of the unpaid balance and other fees.
  
  

Considerations

• Individuals and businesses will often have different debit interest amounts or percentages assessed on their accounts. For example, business accounts may be higher because these accounts have more activity and a greater chance or overdraft or default.