Overdraft Limit Frequently Asked Questions

Do you have a safety net on your checking account?
Overdraft Limit protects you against having your checks returned in the event of an inadvertent overdraft of your account, or gives you a reserve for emergencies or unexpected situations. Most of our personal checking accounts offer Overdraft Limit with direct deposit or upon credit approval. Be sure to look for the types of Overdraft Limit offered for each type of personal checking account.

There is no fee for having this "safety net" on your account, you are only charged for this service if you overdraw your account. You do not have Overdraft Limit on your account (even with a direct deposit) until you receive written confirmation from us that it has been added to your account.

Here is how Overdraft Limit works for you. When you need more money than you have in your account, Overdraft Limit will allow you to withdraw funds, or write a check for more money than what is in your account, as long as the withdrawal or check is less than the amount of your balance plus the Overdraft Limit you have.

For example, suppose you do not have Overdraft Limit and your account balance is $50. If you write a check for $100, the bank will charge your account a fee (currently $22.00) for writing a check with insufficient funds, and will then return the check. in most cases the establishment that you wrote the check to will require you to redeem the check and will probably charge you a fee (usually around $20) for writing an NSF check. This means that you have now incurred fees of $42.00 ($22.00) at the bank and $20 at the store) for a check that wasn't even paid.

However, if you had $200 of Overdraft Limit here is how the situation would have worked. When the check arrived at the bank, the computer would have seen that you only have a $50 ledger balance in your account. However, it would also see that you have $200 of Overdraft Limit, which makes you available balance $250. This means that the bank would pay the check and charge you the $22.00 fee for an overdraft transaction. The total charge to you would have been $22.00 compared to $42.00 if you had not had Overdraft Limit. Additionally, you avoid being added to any bad check lists on the the check approval networks or with the merchant.

When you use your Overdraft Limit you must remember to subtract the overdraft fee from you account balance. In the example above you would have subtracted $122.00 from your account: $100 (the amount of the check) plus $22.00 (the amount of the overdraft fee). Your new balance would be negative $72.00. Any additional items that come in while you account has a negative balance will also be charged the NSF fee of $22.00 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.

ATM machine receipts reflect the Overdraft Limit in the available balance.