Overdraft Privilege helps protect you against having items returned in the event of an inadvertent overdraft of your checking account by giving you a reserve for emergencies or unexpected situations.
- There is no fee for having this privilege on your account; you are only charged if you overdraw your account.
- You do not have Overdraft Privilege on your account until you receive written confirmation from us that it has been added to your account.
- To keep Overdraft Privilege, your account must remain in good standing, which means:
- Continuing to make regular deposits to your account within each thirty-day period.
- Bringing your account balance to a positive balance within each thirty-day period.
- You are not in default on any loan or other obligation to Coosa Pines FCU.
- You are not subject to any legal or administrative order or levy against your account with us.
How Overdraft Privilege Works for You
Overdraft Privilege is not a line of credit. However, if you overdraw your account, we have the discretion to pay the overdraft, subject to the limit of your Overdraft Privilege.
For example, suppose you do not have Overdraft Privilege and your account balance is $50:
- If you have a debit item for $100, Coosa Pines FCU will charge your account a fee (currently $28) for having an item with insufficient funds, and will then return the item if adequate funds aren’t available.
- In most cases, the establishment where you made the transaction will require you to pay for the item and will normally charge you a fee (usually around $30) for writing an NSF item.
- This means that you have now incurred two fees ($28 Fee at Coosa Pines and $30 at the merchant) for an item that wasn’t even paid!
However, if you had $500 of Overdraft Privilege, here is how the situation typically would have worked:
- When the item arrived at Coosa Pines FCU, we would pay the item and charge you the $28 fee for an overdraft transaction.
- The total charge to you would have been $28 compared to $28 PLUS $30 in merchant fees if you had not had Overdraft Privilege.
- Additionally, you avoid being added to any bad check lists on the check approval networks or with the merchant.
Making It Balance
When you use your Overdraft Privilege, you must remember to subtract the overdraft fee from your account balance. In the example above you would have subtracted $128 from your account: $100 (the amount of the check) plus $28 (the amount of the overdraft fee).
Remember that any additional items that come in while your account has a negative balance will also be charged the NSF fee of $28 per item. It is important to record these fees. The next deposit that you make will bring your balance to the amount of the deposit minus the amount you were overdrawn (including any overdraft fees).
Understanding Uncollected Funds
If you make a deposit and are informed that a HOLD will be placed on some of the funds deposited, those funds are NOT available for you to withdraw until the date indicated on your notice or receipt.
If an item is presented for payment while the funds in your account are on hold and you have Overdraft Privilege on your account, you will be charged a negative funds fee of $28 to pay the item even though you have a positive ledger balance in your account.
- You have $100 in your checking account and deposit a $700 check on which we place a $500 hold ($200 is available to you immediately) for 3 days. Although you have a ledger balance of $800, only $300 is “available” for checks or other debits to be paid.
- If you have a $500 Overdraft Privilege in the example above, you have available to you $800 to pay debit items. However, you will be charged a $28 fee for any debits paid against your account in excess of the $300 shown above as “available”.
Points to Remember About Overdraft Privilege
- Every debited item on an overdrawn account will be charged an OD fee of $28.
- You must promptly repay the amount of the overdraft and any overdraft fees.
- Your Overdraft Privilege will not be included as part of your available balance at an ATM.
- You must bring your account to a positive balance within 30 days, or the Overdraft Privilege will be removed from your account.
- You do not have Overdraft Privilege until you receive a letter telling you that it has been put on your account.
- You must opt-in to payment of overdrafts for ATM and everyday debit card transactions.
If you have questions, please feel free to call or stop by your local Coosa Pines branch. We'd be happy to help!
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