Question 353.— A customer who is allowed 2 per cent. interest on his daily balances of $5,000 and over in current account is in the habit of making deposits the last thing in the day to make his balance over the $5,000. This is largely withdrawn the next morning and made good again before closing. The effect is that the minimum balance in each day is considerably below $5,000, but the balance at the close of business is always considerably in excess. On what balance should interest be allowed ?

Answer.—There is no doubt that the term " daily balance " means the balance standing in the account at the close of the business each day, and in the account mentioned the customer would be entitled to interest on the balance as appearing in the books at the close of business. Such an account may not be worth the interest paid, but the bank's remedy is to cancel or amend the contract.