What Is Overdraft Protection?

An overdraft occurs when a bank pays a transaction despite insufficient funds in the customer’s account. Overdraft protection is discretionary and not the bank’s contractual obligation.

We may initially provide eligible accounts with $100 in overdraft protection. This applies to checking accounts but excludes money market accounts, student accounts, and business checking products. Once the account has been open for at least 90 days, we may periodically increase the overdraft protection amount to a maximum of $500, as long as your account remains in good standing. You will receive a written notification before any increase occurs, should you qualify.

If you would like to add overdraft protection to your account, please visit any of our offices. You will need to sign the appropriate agreements and disclosures.

What Fees Are Associated with Overdraft Protection?

If you do not have enough funds in your account to cover an item when it is presented, a fee of $39 will be charged, regardless of whether we pay the item or return it unpaid. However, we will not charge either a Returned Item and/or Overdraft Fee(s) for items resulting in a balance of less than $10.

We limit daily overdraft fees charged to an account to a maximum of 5 fees ($195). Additionally, if your account remains overdrawn for more than three consecutive business days, a daily continuous overdraft fee of $7.50 will be charged for each open business day, regardless of having overdraft protection. You should always cover your overdraft quickly to avoid additional fees. If you do not cover your overdraft within 60 days, your account will be closed. Returned Item and/or Overdraft Fee(s) may apply to checks, ACH transactions, foreign ATM usage, and Debit Card or Check Card transactions.

Understanding Your Account Balance for Overdrafts

Your checking account has two types of balances: the current balance and the available balance. When the bank processes transactions for your account, it considers the current balance, any overdraft protection you have, and any holds on the account. If sufficient funds are not reflected in this balance, your account may be overdrawn. Continue reading below for an explanation of how your checking account balance works, as well as the differences between the current balance and the available balance.

Your Current Balance

Your current balance is the amount of money actually in your account at any given time. This balance reflects transactions that have been posted to your account but does not include transactions that have been authorized and are still pending. While it may seem that your current balance is the most accurate display of the funds you can spend, that is not always the case. Your account may have purchases, holds, fees, or other charges and deposits that have not yet been posted. Therefore, these transactions will not be included in your current balance.

Your Available Balance

This balance reflects any holds on your deposits. It also includes pending incoming electronic deposits, like payroll, any pending debit card transactions, and available funds from your overdraft protection, if applicable.

Example of Overdraft Fee or Insufficient Available Balance

If your current and available balances are both $100 and you use your debit card at a restaurant for $35, a hold will be placed on your account, which will reduce your available balance to $65. Your current balance will remain at $100 because the transaction has not yet been posted to your account. If a check you wrote for $75 is presented for payment before the restaurant charge is processed, you will incur an overdraft fee. This happens because your available balance would be $65 (after the hold for the restaurant charge) when the $75 check is cashed. In this case, we may still pay the $75 check and charge you an overdraft fee. This fee will also be deducted from your account, further decreasing your balance.

How Are Transactions Posted to Your Account?

There are two main types of transactions in your account: credits (deposits of money) and debits (payments out of your account). Understanding how each type of transaction is processed is essential for keeping track of your actual balance. The following information explains how we handle credits and debits in your account, as well as their impact on your available balance. This is a general overview of how certain types of transactions are recorded.

Please note that we may receive multiple deposits and withdrawals in various forms throughout the day. Additionally, if your account is overdrawn and we process multiple transactions, you may incur more than one overdraft fee.

Credits

Most deposits are credited to your account when we receive them. However, some checks you deposit may have holds placed on them.

Please refer to the Funds Availability Statement at the end of this FAQ for more details.

Debits

You can make various types of debit transactions from your account. Keep in mind that merchants and other financial institutions may present transactions for payment in different ways. Additionally, we do not have control over when these transactions are received and posted to your account.

What Is a Debit Card Authorization Hold?

When you use a debit card for a signature or “credit” transaction (without entering your PIN), the merchant submits the transaction amount. This amount is put on hold and deducted from your available balance immediately. The hold is lifted once the transaction clears or when the merchant’s authorization expires, whichever happens first. The authorization expiration is set by the merchant and can last up to six days if the corresponding transaction is not processed. This hold helps establish the available balance in your account.

Will Debit Card Authorization Holds Apply to All My Purchases?

No, debit card authorization holds only apply to debit card transactions when you sign your name or do not enter a PIN. PIN-based and ATM transactions typically settle on the same business day as they are authorized.

What Is the Difference Between Current Balance and Available Balance?

Your available balance reflects any holds on authorizations or deposits. This balance helps the bank determine how much money you have available when transactions are processed. The available balance includes all transactions that have cleared your account up to that point and reflects any items currently on hold. If your available balance is insufficient to cover a transaction, the bank may still process it, resulting in an overdraft fee.

In general, available funds are decreased by the amount of authorized transactions. However, for specific types of transactions, the authorized amount may differ from the actual settlement amount. For instance, in the case of gasoline purchases, the bank may reduce available funds by the full authorization amount (which may exceed the actual purchase price), reduce available funds by a much smaller amount (like $1), or choose not to decrease available funds at all.

How Can I Opt-out Of Overdraft Protection?

If you decide you no longer want overdraft protection on your account, simply call or visit one of our offices to request to opt out. An in-office request may require signing opt-out paperwork. 

What Are My Alternatives To Overdraft Protection?

The bank offers an automatic sweep transfer service. For instance, your savings account can automatically cover your checking account whenever it is overdrawn. Please note that a fee of $7 will be charged for each sweep transfer. A transaction is counted each time the sweep occurs, not for every item covered by the sweep. If you have both a sweep transfer and overdraft protection, the sweep will take place first, followed by the overdraft protection, until your overdraft limit is exhausted.

To set up an automatic sweep transfer, please visit one of our branch offices, where you will need to sign the necessary form.

Another option for overdraft protection is a line of credit. To find out if you are eligible for a line of credit, please get in touch with any of our branch offices. Please be aware that overdraft lines of credit incur a fee of $7 per transaction, in addition to interest charges. Again, a transaction is counted each time the sweep occurs, not for each item covered.

What Is the Difference Between A Sweep Transfer And Overdraft Protection?

A sweep transfer happens when a bank transfers funds from another account to cover an overdrawn account. The bank charges a fee of $7 for each transfer made. On the other hand, Overdraft Protection allows the bank to pay a transaction that exceeds the available balance in the checking account, resulting in a negative balance. For this service, the bank charges a fee of $39.

Funds Availability Disclosure

Our policy is to make the funds from your cash and check deposits available to you on the first business day after we receive your deposit. For electronic direct deposits, the funds will be available on the same day we receive them. Once the funds are available, you can withdraw them in cash. We will use these funds to cover the checks you have written.

To determine the availability of your deposit, every day is considered a business day except for Saturdays, Sundays, and Federal holidays. If you make a deposit before 6:00 P.M. from Monday through Thursday, or before 6:00 P.M. on Friday, it will be processed that same day as your deposit date. However, if you deposit after these cut-off times or on a day when we are closed, your deposit will be processed on the next business day we are open.

Longer Delays May Apply

In some cases, we will not make all of the funds you deposit by check available to you on the first business day following your deposit. Funds may not be available until the second business day after the day of your deposit. However, a minimum of the first $225.00 of your deposits may be available on the first business day.

If we are unable to make all the funds from your deposit available on the first business day, we will inform you at the time of your deposit. We will also let you know when those funds will be available. If your deposit is not made directly to one of our employees, or if we decide to take this action after you leave, we will mail you a notice the day after we receive your deposit.

If you need access to your deposit funds immediately, please ask us when they will be available.

Additionally, funds you deposit by check may be delayed for a more extended period under the following circumstances:

• We believe that the check you deposited will not be paid.
• You deposit checks totaling more than $5,525.00 in a single day.
• You redeposit a check that has been returned unpaid.
• You have repeatedly overdrawn your account in the last six months.
• There is an emergency, such as a failure of communications or computer equipment.

We will inform you if there is a delay in your ability to withdraw funds and let you know when the funds will be available. Typically, the funds will be accessible no later than the 7th business day following your deposit.

Special Rules For New Accounts

If you are a new customer, special rules will apply during the first 30 days your account is open. Here are the details:

Cash and Check Deposits:

   – Funds from cash deposits, wire transfers, and the first $5,525 of a day’s total deposits from cashier’s checks, certified checks, teller’s checks, traveler’s checks, and government checks (federal, state, and local) will be available on the first business day after the deposit, provided the deposit meets specific conditions.

   – Any amount exceeding $5,525 will be available on the ninth business day after the deposit.

   – If you do not make your deposit in person to one of our employees, the first $5,525 will not be available until the second business day after the deposit (excluding US Treasury Checks).

Electronic Direct Deposits: Funds from electronic direct deposits will be available on the same day we receive the deposit.

All Other Check Deposits: Funds from all other check deposits will be available on the 11th business day after the deposit.

Are you interested in Overdraft Protection? If so, please visit one of our locations for more information, or to complete the necessary applications and disclosures.