Overdraft Protection Options
Overdraft Protection provides you with peace of mind when life doesn’t go as planned. For those times that you forget to make the deposit before your cable bill is withdrawn, or your direct deposit is unexpectedly delayed – Andrews Federal has several ways to help save you the embarrassment and additional costs involved with an unexpected overdraft.
An overdraft occurs when there aren't enough funds in your account to cover a particular debit, and Andrews Federal pays the item for you.
How does it save me money and embarrassment?
Let’s use a real example.
Without Overdraft Protection: You write a check at the hardware store for $100, but you only have $50 in your checking account. When that check is presented at the credit union for payment, we see that you do not have the funds to pay for it, and we return it unpaid to the hardware store as “insufficient funds (NSF).” The credit union charges you a fee for processing the NSF check and the hardware store would likely charge you a fee for writing a bad check.
With Overdraft Protection: When the credit union processes your $100 check, instead of returning it as insufficient funds, the credit union pays the check for you even though you don’t have the funds in your checking account to cover it (using one of the overdraft options listed below). The credit union may still charge you a fee for processing the overdraft (depending on the overdraft option used), but the hardware store gets their money and has no idea that the overdraft occurred. This saves your reputation at the local hardware store AND prevents those additional fees.
What are my overdraft options?
Andrews Federal offers several methods to cover your overdrafts.
1.) Lowest Cost Option : Transfer From Savings
With an overdraft transfer from savings, the credit union checks your savings account balance anytime an insufficient funds item is presented for payment from your checking account. If there are funds available in your savings, they are automatically transferred into your checking to pay the item. There is no fee for this transfer. You can also choose which savings account to link to your checking, and even have the option of setting up multiple transfers if you keep extra money in more than one savings account with us.
2.) Overdraft Line of Credit
Maybe you don't typically keep a balance in your savings account – you may prefer using a line of credit instead. Like the Transfer from Savings option, an Overdraft Line of Credit is linked to your checking account and will automatically transfer available funds to cover any insufficient funds items that are presented for payment. Each such transfer to your checking is an advance against your Line of Credit, increasing your loan balance. While there are no fees for the transfers themselves, you will pay interest on any outstanding Line of Credit balances. If you pay off the Line of Credit balance on the same day that it is advanced, you will not be charged any interest. Overdraft Lines of Credit are a loan product and are subject to approval.
3.) Privilege Pay
Privilege Pay is our overdraft program that allows you to withdraw more than your account balance for a short period of time in order to cover unexpected emergencies. In essence, we advance you the money you need (to pay presented items) by allowing your account balance to go temporarily negative. We charge you a $32.00 fee for each item cleared in this manner, although there is a cap to how much your account will be charged in Privilege Pay fees each day ($224.00). You are expected to pay back the negative account balance in a reasonable period of time (no more than 25-30 days later, maximum).
Privilege Pay covers overdrafts that occur from checks that you wrote, recurring authorizations with your debit card that occur periodically (such as a monthly gym membership payment or an online subscription), and pre-authorized withdrawals from your checking account that you gave your checking account information to set-up (such as utility or insurance payments).
Privilege Pay is a courtesy that the credit union extends to you to cover an unexpected overdraft and it is offered at our discretion. We wouldn't want our member’s accounts to get in too deep with a large negative balance so there is a limit to how much Privilege Pay will cover.
Your account is automatically enrolled for Privilege Pay as long as your account meets certain requirements. For more details about Privilege Pay, click here. If you decide that you would prefer to not have access to Privilege Pay, you can Opt Out of this program at any time, by contacting us at 1.800.487.5500.
4.) Privilege Pay Coverage for Debit Card Purchases
An additional option that you have is to extend your existing Privilege Pay coverage to also authorize one time debit card purchases even if you do not have the funds in your checking account at the time of purchase. Your normal Privilege Pay limit still applies, and you are charged a $29.00 fee for each purchase that is paid by Privilege Pay (up to the $203.00 daily fee cap).
Unlike standard Privilege Pay, access to Privilege Pay coverage of your debit card purchases is not automatic once your account meets certain requirements. Your account must meet those criteria PLUS you must Opt In to request this additional coverage. If you choose to not Opt In, your debit card purchase will be denied if you do not have sufficient funds in the account at the time of purchase to pay for it (unless you have another form of overdraft coverage, such as Transfer From Savings or Overdraft Line of Credit).
You can Opt In yourself by clicking the Services tab from within online banking, selecting Privilege Pay and following the prompts. You may also complete the Privilege Pay Debit Card Option form, located at the button on the right of this page, and return the form to any branch office, scan and email it to DepositSupportServices@andrewsfcu.org , or fax it to 1.301.702.5334.