Which statement is false regarding overdrafts?

Points: 1

1. Overdraft protection is an arrangement that protects customers who write cheques for amounts that exceed their chequing account balances.
2. Overdraft protection is a short-term loan from the depository institution where the chequing account is maintained.
3. Overdraft protection is an arrangement that protects customers who withdraw amounts that exceed their account balances.
4. When a transaction causes your bank balance to go negative, your bank charges you a fee for this service plus interest, and may also charge a monthly fee simply for having overdraft protection available on the account.
5. Being frequently overdraft on your chequing account is a sign that you are spending less money.