An overdraft happens when you don’t have enough money in your checking or savings account to cover a withdrawal or payment.
When this happens, the Bank has two options:
- The Bank pays the check or transaction and then charges you a fee.*
- The Bank returns the item. In this case the Institution for Savings does not charge you a fee. That transaction, or item, is returned and you may be charged a fee and/or late charges by the payee.
When you do not have enough money in your account to cover a transaction, we will evaluate your overdraft based on a variety of factors such as tenure, deposit frequency but primarily your overdraft history. The Bank pays overdrafts at our discretion and does not guarantee that we will always authorize and pay any type of transaction.
Strategies for Avoiding Overdraft Fees
Overdraft fees can put a dent in your budget. But there are a few strategies you can implement to help you prevent paying this potentially costly expense.
- Sign up for online banking
Signing up for online banking allows you to track and watch your checking and savings accounts closely. You can monitor money coming in and going out. The Bank strongly recommends this option which will also assist you in quickly identifying and mitigating account fraud. - Track your expenses
You can track your expenses in many ways. You can track them online or by using a written check register to record all of your transactions. It’s a good idea to record all of your deposits and withdrawals. This will help you maintain a running account balance. Reviewing and balancing statements each month. - Set up balance and transaction alerts
We offer the option to receive text, email and in app alerts for a debit/withdrawal over a specified amount or when account dips below a specific amount. By establishing account alerts, you’ll know when to transfer or deposit more money into your account to cover any upcoming transactions that could lead to a negative balance. This is also a great tool to assist you with identifying and mitigating account fraud. - Link your accounts
You can link an eligible Institution for Savings account to authorize or pay your transactions for a small fee* in the event don't have enough available money in your checking account.
Paying an overdraft fee is a costly and often unnecessary expense. The best way to avoid them is to track your expenses and stay within a budget. Being proactive will not only help you prevent overdraft fees, it also will help you successfully manage your money.
*See our Fee Schedule for details.