Automatic Overdraft Protection

D

The correct answer is D. Overdraft protection.

Overdraft protection is an arrangement between a depositor (account holder) and a depository institution (bank) that allows the bank to automatically pay a check or debit card transaction that exceeds the available balance in the account.

If the account holder has overdraft protection, the bank will cover the transaction by transferring funds from a linked account (such as a savings account) or by extending a line of credit to cover the overdraft. In exchange, the account holder will be charged a fee for each overdraft transaction, which can add up quickly if the account holder regularly overdrafts their account.

Overdrafts, as mentioned in option A, are a situation where an account holder spends more money than is available in their account, resulting in a negative balance. This can lead to bounced checks, declined transactions, and fees.

Option B, undercrofts, is not a commonly used financial term and does not have any relevance to this question.

Checkbook ledger, mentioned in option C, is a record of an account holder's transactions in their checkbook. It is used to keep track of deposits, withdrawals, and account balances. While a checkbook ledger can help prevent overdrafts, it is not a specific arrangement with a depository institution to cover overdrafts.

Therefore, the correct answer to this question is D. Overdraft protection.