Overdraft FAQs
Your ATM and everyday debit card transactions will not be approved if you do not have sufficient available funds in your account, even if you are currently enrolled in Overdraft services unless we first receive your affirmative consent (Opt-In) to do so. The following FAQs will help to clarify what this means to you and help you decide if this service is right for you.
1. What is an overdraft?
An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. Overdrafts apply to checks, debit cards or other transactions that are paid when the available balance in your deposit account is less than the amount of the transaction, which creates a negative balance in your account.
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2. Is an overdraft different from an NSF item?
Yes. An "NSF item" (also called a "bounced check") occurs when an
item (such as a check or other transaction presented for payment)
is returned unpaid because the available balance in your account
is less than the amount of the item.
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3. How can I avoid overdrafts?
The best way to avoid overdrafts and associated fees is to manage
your account so you don’t overdraw it.
We recommend that you:
- Keep track of how much money you have in your checking account; a great way to do this is by monitoring your account balances with free personal online banking. Remember that some checks and automatic payments may not have cleared yet.
- Pay special attention to your electronic transactions. Record your ATM withdrawals and fees, debit card purchases, and online payments.
- Don’t forget about automatic bill payments you may have set up for utilities, insurance, or loan payments.
Sometimes mistakes happen. If you do happen to overdraw your account, deposit money into the account as soon as possible to bring the account to a positive balance.
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4. What is Overdraft Privilege?
Overdraft Privilege is a "courtesy overdraft" benefit we offer to customers with eligible checking accounts. With Overdraft Privilege, we may (at our discretion), pay items presented against your account when you don't have sufficient available funds. You will still pay an overdraft fee for each item that is paid, but you will avoid the merchant's returned item fee. Many different types of items may be presented against your account; common items include: checks, ACH, debit card transactions, and ATM withdrawals.
Historically, once you satisfy the requirements for eligibility, we add Overdraft Privilege to your account, and all presented items would be considered for payment.
Federal regulations require that you "Opt-In" if you would like us to consider paying ATM and everyday debit card transactions that may overdraw your account. If we don't hear from you, these transactions will automatically be declined if your current available balance is insufficient at the time of transaction.
The regulations apply only to ATM and everyday debit card transactions, and does not affect other transaction types (checks, ACH, recurring debit card transactions). If your account qualifies, we may still enroll you in Overdraft Privilege and consider paying all items except ATM and everyday debit card transactions; if you would like your coverage extended to include these transaction types, simply let us know.
Although the charges associated with this form of overdraft protection may be higher and the payment of overdrafts remains discretionary, this may be an appropriate "back-up" plan to help you avoid declines for occasional or inadvertent overdrafts.
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5. What are the requirements for Overdraft Privilege?
Eligible accounts have been opened for at least thirty (30) days and thereafter must be maintained in good standing, which includes:
- Continuing to make deposits consistent with your past practices, and depositing at least $400 in your account within each thirty (30) day period
- You are not in default on any loan obligation to us
- Your account is not the subject of any legal or administrative order or levy, such as bankruptcy or a tax lien
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6. Is there some other way I can have these kind of transactions accepted without having an overdraft fee charged?
Yes. We always encourage our customers to have a savings or money market account at Fremont Bank. If you sign up for Account Linked Overdraft Protection, you can link an eligible account to your checking account. If presented items would cause your checking account to become overdrawn, we will automatically make a transfer from your linked account. Keep in mind, there is a transfer fee every time you use this service, but you will not be assessed an overdraft fee. We also offer an Overdraft Line of Credit, in which your checking account is linked to the overdraft line. At the end of the day, we will advance from your overdraft line (in increments of $100) to cover the total amount of the overdrafts, up to the available credit line limit. There is a transfer fee every time you use this service, and you are required to pay interest on any outstanding balance; an annual fee is charged after the first year for the overdraft line of credit.
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7. Is Overdraft Privilege different from Overdraft Protection?
Yes, they are different.
With Overdraft Protection:
- You can request that we link a transactional account to your checking account.
- If you have sufficient funds in your linked account(s) for overdraft protection, your transactions will be approved. If not, your transactions will be declined, unless you have available funds from an overdraft line of credit and/or Overdraft Privilege.
- Available funds in your linked account(s) will be used to pay transactions on your checking account and help you avoid overdrafts or returned items.
- A single Account Linked Overdraft Protection transfer fee will be assessed, regardless of the number of transactions we paid from your account that day.
With Overdraft Privilege:
- This is a discretionary service that may help you avoid declined transactions — may be important especially if you do not have an alternative form of payment to complete an important purchase.
- Our standard overdraft fees will be assessed for any transactions that are paid to cover overdrafts on your account. Because the overdraft fee is higher than with Overdraft Protection, we encourage lower-cost options first.
- We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction.
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8. What checking accounts are eligible for Overdraft Privilege?
Overdraft Privilege is available on most checking accounts. It is not available on savings account or any account owned by a minor.
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9. How much does Overdraft Privilege cost?
Overdraft Privilege has no fee if it is never used. We will assess our standard overdraft fees if your account does not have sufficient funds when your transactions are submitted for payment from your account. However, if a POS (Point-of-Sale) transaction overdraws your account by $5 or less, no overdraft fee will be assessed.
Additionally, there is a $6 per day fee if your account remains overdrawn for three or more consecutive days.
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10. How much is an overdraft fee?
Our current overdraft fee is $28 per item for paid or returned items, with a maximum of $140 per day. Also, if your account is overdrawn for 3 or more consecutive business days, we will charge an additional $6.00 per day.
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11. Can I make a deposit or transfer to avoid overdraft fees?
Yes. There is no fee if your account is accidentally overdrawn during the day and you make a sufficient deposit or transfer before the posted cut-off time on the same business day.
- If you opt-in, you may be allowed to continue with a debit card purchase or an ATM transaction, and you can deposit funds to cover the transaction later that same business day (or on the next business day for weekend and holiday transactions).
- If the debit card transaction is made on a non-business day (such as a weekend), you have until the posted cut-off time on the next business day to deposit funds.
- If a check deposit is subject to a hold, those funds will not be immediately available to cover debit transactions.
- A cash deposit or transfer of funds before the cut-off time will typically be available to pay transactions that night.
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12. What is different because of this regulation?
If you currently have Overdraft Privilege and you chose to opt-in, nothing! Your debit card will continue to work as it did previously, with no interruption in service. If you opt-out, or if we don't hear from you, your ATM and everyday debit card transactions on accounts with insufficient funds will be declined.
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13. How do I opt-in or opt-out?
There are a few different ways:
- You can complete the form on our website.
- You can call us at 877-743-2582 to opt-in over the phone.
- You can stop in at any Fremont Bank location.
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14. Can I add or delete this service at a later date?
Sure. Just remember these transaction types will not be covered until you tell us otherwise. You can change your preference (opt-in or opt-out) at any time.
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15. How does this regulation affect Overdraft Privilege?
If you do not opt-in, Overdraft Privilege will continue to cover checks, recurring online bill payments and ACH payments. By opting-in you will extend coverage to include ATM and everyday debit card transactions.
Please note: By opting-out of ATM and everyday debit card transaction overdraft coverage, you are NOT opting-out of Overdraft Privilege for checks, recurring online bill payments and ACH payments. If you do not want your account enrolled in Overdraft Privilege, please stop by a branch or give us a call.
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16. If I don’t opt-in, will everyday debit card transactions ever create an overdraft?
Unfortunately, they might. Fremont Bank will typically only approve your transaction if you have sufficient funds in your account at the time of the transaction. However, we may not receive the final transaction for payment until later when sufficient funds may no longer be in your account. In these circumstances, the following occurs:
- Fremont Bank must pay the transaction if we have provided authorization (approval) to the merchant.
- An overdraft may occur (based on available funds) resulting in a negative balance that you must repay.
- No fee will be assessed for this overdraft1.
1If you have opted-in your account, we will assess an overdraft fee.
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17. What happens if I don’t opt-in?
You will automatically be opted-out if you do nothing.
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18. Can I have different choices for different accounts?
Yes. You will need to opt-in or opt-out on each account that is
attached to an ATM or debit card.
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19. I have a joint-account. Can one of us opt-in and one opt-out?
No. The account can only have one choice even if you have multiple ATM or debit cards.
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20. Does this affect business accounts?
No. This regulation does not apply to business accounts.
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21. How do I determine if this service is right
for me?
If you typically keep track of your balance and only have an occasional or inadvertent overdraft, you might consider opting-in to help you avoid declined ATM and everyday debit card transactions or as a "back-up" plan to cover an unexpected expenses.
Fremont Bank offers a variety of services that can help you manage your accounts and avoid debit card declines. We encourage you to consider the lower-cost services first. We further encourage you to contact one of our associates to discuss all of our overdraft protection solutions and determine which one is the best fit for you.
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Learn ways to protect your personal information by visiting our Fraud Prevention page. If you have additional questions, please contact us at 800-359-BANK (2265) or email onlinebanking@fremontbank.com.
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